Mortgage enquiries have risen significantly, suggesting home buyer demand is on the up.
According to Veda’s Quarterly Consumer Credit Demand Index, credit demand for the June quarter increased by 3.9 per cent over the past year.
In addition, mortgage enquiries increased to 6.9 per cent in the June quarter, accelerating from 1.9 per cent in the March quarter, the largest increase since June 2010.
The volume of mortgage enquiries increased in all states, with the greatest rises in WA, which recorded 15 per cent growth, followed by NSW which saw 13 per cent growth and the Northern Territory which enjoyed 10.3 per cent growth.
“Mortgage enquiries are a good indicator of home buyer demand, with movements in mortgage enquiries tending to lead movements in house prices six to nine months later,” Veda’s general manager of consumer risk, Angus Luffman, said.
“The increase in mortgage enquiries appears to suggest better housing market conditions, a good sign in light of the potential tests facing the Australian economy in the future.
“The fact that the June quarter recorded the largest volume of mortgage enquiries in three years suggests that house price growth is likely to remain in positive territory in the near term, for those states and regions experiencing enquiry growth.”
In contrast to the growth in mortgage enquiries, personal loan applications eased from a notably high level of 10.3 per cent in the March quarter to 6.3 per cent in the June quarter.
“The Veda Consumer Credit Demand Index has historically provided an early indication of movements in consumer spending and retail sales. The easing in personal loan applications suggests that consumers are reining in their spending due to concerns over the labour market and the fall in the Australian dollar, raising the price of big items such as household appliances and imported cars.”