Home loan demand has pulled back, falling 0.9% in March according to official figures.
The figures released by the Australian Bureau of Statistics (ABS) show the number of owner-occupied housing loans approved dropped almost 1% after rising by 1.5% the month prior, in February. The total number of home loans approved in March was 56,316.
However, Mortgage Choice
CEO John Flavell
said approvals still remain high by long term averages.
“The number of home loans written in March was actually 3.8% higher than the same month last year,” Flavell said.
“This would suggest the property market remains alive and well. Demand is strong and will remain so for some time to come.”
The drop in home loan demand was driven by a large fall number of loans approved for the purchase of new housing, which fell 5.2% in March. The number of loans approved for the purchase of established housing dropped slightly, by 0.5%.
According to Flavell, the Reserve Bank’s decision to cut the cash rate earlier this month should help to boost the property market.
“With many of Australia’s lenders passing on the Reserve Bank’s rate cut, the cost of borrowing has become more affordable than ever before. As a result, I would expect to see continued demand for property,” he said.
Over the month of March, the value of those loans approved totalled more than $32 billion. This is down just 0.2% on the month prior.
“While we did see a 1.2% drop in the value of owner occupied housing written over the course of the month, the value of investment loans actually climbed 1.5% to just over $12 billion,” Flavell said.