Mortgage applications continue to slide: Veda

Mortgage applications fell in all states except the ACT and Victoria in the June quarter, where applications grew by 6.1 per cent and 2.8 per cent respectively. However, mortgage applications in Victoria have eased significantly, down from an annual growth rate of 14.5 per cent experienced in the June 2015 quarter, according to the Index.

Veda reported the sharpest decline in mortgage applications in the June quarter was in the NT (-14.3 per cent), where mortgage applications have continued to decline since the December quarter 2014. WA (-12.1 per cent), Tasmania (-11.5 per cent) also saw significant falls, followed by NSW (-5.2 per cent), Queensland (-3.3 per cent) and SA (- 0.7 per cent).

Angus Luffman, Veda’s general manager of consumer risk, said historically, movements in Veda mortgage applications have tended to lead movements in house prices by around six to nine months, with mortgage applications a good indicator of home buyer demand, and an excellent indicator of housing turnover.

“Regulatory driven changes to investor mortgages, implemented in the middle of last year have contributed to the cooling of mortgage demand over the past 12 months,” he said.

"The continuing weakness being seen in Veda’s mortgage applications data suggests the housing market will remain subdued for the foreseeable future."

[Related: Banks change mortgage policies as apartment glut looms]