Home loan demand bounced back in June, recording a jump of 1.2% in the number of new mortgages written throughout the month.
According to the data released by the Australian Bureau of Statistics (ABS), 57,609 home loans were written throughout June, up from 56,945 in May.
The rebound in demand is likely linked to the Reserve Bank’s cash rate cut announced in May, says Mortgage Choice CEO John Flavell
“In May, the Reserve Bank of Australia made the decision to trim the official cash rate by 25 basis points. This rate cut was then filtered down to borrowers and potential property buyers by way of lower home loan interest rates.
“These rate cuts helped make the cost of borrowing more affordable than ever – which is something Australians were acutely aware of.”
The ABS data showed that more than 49,000 home loans were approved for the purchase of established dwellings, up 1% from May. Demand for new properties also rose, with the number of loans written up 2.7%, to 2,739.
In addition to the number of new mortgages rising, the total value of home loan approved also increased. More than $32 billion worth of home loans were approved throughout the month of June, up 2.3% from May.
“Almost $12 billion in investment loans were written, while the value of all owner occupied loans surpassed $20 billion,” Flavell said.
“Of course, with data from Core Logic showing that property values across the combined capital cities continue to climb month after month, I am not surprised to see an increase in the value of all home loans written.”
According to research conducted by CoreLogic, property values rose 0.5% across the combined capital cities over the month of June.