The number of dwelling commitments has increased by 0.5% throughout January, continuing an upward trend which is now into its sixth month.
According to the latest data from the Australian Bureau of Statistics (ABS), the number of loans written in January was 55,153 which was up from the 54,876 loans written in December last year.
“The latest data suggests that current low interest rates are continuing to fuel buyer demand for property,” said Mortgage Choice
CEO John Flavell
As well as the increased home loan demand, the value of home loans written rose by 1.5% to $33.9bn from December to January.
“This can be largely attributed to the increase in value of investment loans approved,” Flavell said.
“During the month of January, more than $13.7bn in investment loans was approved – up 4.2% from December. On the other hand, the value of owner-occupied housing loans fell 0.2% to $20.1bn.”
For January 2017, the total number of owner occupier loans for the purchase or construction of new homes fell by 1%, a drop of 0.4% from the year before, said Shane Garrett
, senior economist of the Housing Industry Association (HIA).
The volume of loans for new home purchases decreased by 0.3% in January while lending for the construction of new dwellings dropped by 1.4%.
“With 2016 representing the strongest year for new dwelling starts since the end of WWII, a huge number of new homes are now becoming available for purchase making lending volumes in this area accordingly high,” Garrett said.
“However, the number of loans to people constructing their own home has actually been falling back since mid-2014 and this trend has affected overall lending activity.”
Looking forwards, Flavell said he expected home loan demand to continue to rise over the next couple of months.
“We are now in autumn, and traditionally people will want to buy a home and settle before the winter period,” he said.
“On top of that, interest rates remain at historically low levels, which is helping to keep heat in the property market.”
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