Home loan demand has hit an eight-year high, according to official figures.
Home loan approvals climbed 2.6% in December 2015, figures from the Australian Bureau of Statistics (ABS) have revealed, clocking 58,552 loans settled over the month. The last time more than 58,500 home loans were approved in one month was back in January 2008.
“December was an incredibly strong month in terms of home loan approvals. The fact that we haven’t seen this level of demand for home loans since 2008 is a testament to the ongoing strength of the property market,” Mortgage Choice
chief executive officer John Flavell said.
“Pleasingly a, the data shows that ll parts of the market improved over the month of December. The number dwelling commitments approved for the construction of new dwellings was up 1.8%, while the number of loans written for the purchase of new dwellings and the purchase of established dwellings was up by 12.4% and 2.1% respectively.”
The total value of home loan approved also increased in December, up 0.8% over the month to more than $33.5 billion. The value of all investment loans written was up 0.6%, while the value of all owner occupied home loans written was up by 0.9%.
While it was a welcome result, Flavell says it wasn’t at all surprising.
“At Mortgage Choice, we know from our own data that December is a traditionally hot month in terms of home loan settlements, as Australians are keen to finalise their property plans before the New Year commences.”
But he says the property market is likely to remain elevated.
“Interest rates continue to sit at record lows, making the cost of borrowing more affordable than it has been in a long time. As such, we should continue to see a steady stream of buyers entering the market looking to take advantage of the current rate environment.”