Mortgage applications up by a third, according to experts

by Mike Wood03 Aug 2021

Mortgage applications grew by a third in June as the Australian economy moved back towards a positive footing following the 2020 lockdowns, according to research firm Equifax.

However, it remains to be seen whether the economy will bounce back as quickly from current lockdowns that are affecting New South Wales and parts of Queensland.

“Strong demand for mortgages across Australia continues and is up +46.7% on pre-pandemic (June quarter 2019) levels as a result of low interest rates and government stimulus which has driven re-financing, first home buyers, as well as those purchasing a second property,” said Kevin James, general manager of advisory and services at Equifax.

Strong demand for mortgages continues across Australia fuelled predominately by record low interest rates. Government stimulus for first home buyers and renovations also plays a role. With low interest rates we're seeing an increase in those looking to re-finance for a better deal as well as new first home buyers and those purchasing a second property.”

James said it was too early to know if economic recovery could be sustained through more extended lockdowns.
“This remains to be seen,” he said. “Equifax is watching the situation closely as we are now facing prolonged lockdowns in NSW and different levels of government support this time around.”

“Initial insights show a softening of credit demand since the beginning of July with personal loans and auto finance applications down, with NSW falling more steeply. Mortgage demand tends to have a longer lead time and has held up in the initial weeks of lockdown.”

“What we've seen from previous lockdowns is that the Australian economy is resilient. As states emerge from lockdowns, we see an improvement in consumer confidence and in turn credit applications.”

“Victoria, which has had the most lockdowns during the pandemic in 2020, bounced back over the last two quarters. The extent of the current lockdowns will be a key factor, as well as the impact of mortgage deferrals and the provision of government stimulus which were critical in previous lockdowns. Equifax is continuing to monitor the situation closely.”