Home loan demand reaches 6-year peak

Home loan demand has continued to rise over April, reaching its highest level since 2009, however one franchise head says it may start to slow



Australians are still scrambling to buy property despite widespread debate over housing affordability, with home loan demand reaching its highest level in six years.

According to data from the Australian Bureau of Statistics, home loan demand climbed 1% higher over the month of April, with 53,951 home loans approved over the course of the month, up from 53,442 in March. 

Mortgage Choice chief executive John Flavell says low interest rates are keeping housing very popular with potential home buyers and property investors. 

“Rates are sitting at all-time lows, which is encouraging all types of potential buyers to take the leap and purchase property,” he said. 

“We haven’t seen this level of demand for home loans since 2009 when the boosted First Home Owner grants were in place.”

With the demand for home loans in its element, home values are also increasing month after month with CoreLogic RP Data figures showing a 0.8% growth in dwelling values across the combined capital cities over April. 

“Over the last 12 months, Sydney has outperformed every other capital city in terms of property price growth, with values climbing 14.5% year on year,” Flavell said. 

However, Flavell says he wouldn’t be surprised to see the rate of growth start to slow as some of the recent changes to lender policy start to take effect.

“Over the past month and in-line with requests from the Australian Prudential Regulation Authority (APRA), many of Australia’s lenders have started to make some significant changes in the areas of policy and pricing in an endeavour to limit lending growth to investors,” he said. 

“As these changes start to take effect, I think we may see a slight reduction in investor demand and the overall value of all dwelling commitments.”

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