Mortgage demand has seen its first increase in eight quarters, leading an analyst to predict house price recovery is not far behind.
The Veda Quarterly Consumer Credit Demand Index has shown the first increase in mortgage enquiries since 2009. Enquiries rose 1.5% year-on-year, driven by strong increases in Queensland, NT and WA.
Veda head of consumer risk, Angus Luffman, predicted that house prices could begin to see a recovery if mortgage demand was sustained.
"Turning points in mortgage enquiries usually occur one to three quarters ahead of turning points in house prices, an early warning sign which could indicate that after a continued decline, mortgage enquiries may have bottomed out. Veda mortgage enquiries are closely related to the number of housing finance approvals so this is a trend to watch, particularly if you are hoping for a future pick-up in house prices," Luffman said.
Overall credit demand continued its decline, falling 4.8% year-on-year. Credit card applications were particularly weak, falling 8% year-on-year. Personal loan applications fell 1.4%, but saw an 8.3% increase in WA.
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