Home loan demand rose slightly in July, underpinned by an increase in refinancing commitments, according to new data from the Australian Bureau of Statistics (ABS).
The latest Housing Finance data from the ABS reveals that, in seasonally adjusted terms, 52,647 home loans for owner occupiers were approved throughout July, an increase of 0.4% from June.
The number of refinancing commitments for owner occupied homes rose by 3%.
The value of owner occupier loans rose by 1.3% to $21.1billion, while the value of investment housing loans fell by the same amount. This meant the total value of both owner occupier and investment loans combined rose by 0.4% to $31.4million.
The data also revealed figures on the number of first home buyer commitments. Total owner occupier loans fell to 18% from 18.1% over the month. The average loan size fell by $4000, to $345,800.
The average loan size for all owner occupied housing commitments rose $900 to $397,300 for the same period.
CEO of Mortgage Choice, Susan Mitchell, said the downward trajectory of national dwelling values could support home loan demand over the coming months.
She added, “Looking ahead, I suspect we may see an increase in refinancing commitments as three of the nation’s major lenders recently announced they would be increasing the interest rates charged on their variable rate home loan products.
“According to CoreLogic national dwelling values fell 0.6% in July, led by a 0.6% drop in Sydney and a 0.9% drop in Melbourne, which together have a significant effect on the national housing market’s performance.
“Borrowers should keep in mind that lenders will be competing for high-quality borrowers who satisfy new, stricter lending criteria.”