Demand for home loans dropped again in January, according to new data from the Australian Bureau of Statistics.
The bureau’s data shows a 1.1 per cent month-on-month decrease, from 55,161 approved home loans in December 2017 to 54,443 in January 2018.
The data also shows the lowest number of dwelling commitments since May 2017 when 54,410 loans were approved.
“The fall is consistent with expectations that the housing market is starting to come off the boil,” Mortgage Choice CEO John Flavell said.
The CEO also noted that the data is supported by CoreLogic’s Hedonic Home Values Index, which found that property price growth had “eased considerably” in most capital cities across Australia.
Sydney experienced the largest price drop of 2.4 per cent in the three months to February, followed by Darwin, where property values fell by 2 per cent over the same quarter.
Property prices across Australia decreased by 0.1 per cent in February, taking total housing values down by 0.8 per cent from peaking in September 2017, according to Mr Flavell.
“Unsurprisingly, the data points to a steady market that is easing slightly. What’s more interesting is the changing shape of the market,” the Mortgage Choice CEO said.
He cited further ABS data which shows a 3.1 per cent month-on-month increase in property construction commitments in January, and a 1.5 per cent decline in the purchase of established dwellings.
“This is likely to be driven by the increasing volume of first home buyers entering the market, fuelled by first home buyer incentives in New South Wales and Victoria,” Mr Flavell said.
He added that the total value of all home loans approved grew by 0.7 per cent to just over $33 billion in January.
Despite the drop in home loan demand over two consecutive months, Mr Flavell believes that the relatively low mortgage interest rates by historical standards will keep demand “relatively strong”.
[Related: Demand for fixed rates continues to fall]
Tas Bindi is the features editor for The Adviser magazine. She writes about the mortgage industry, macroeconomics, fintech, financial regulation, and market trends.
Prior to joining Momentum Media, Tas wrote for business and technology titles such as ZDNet, TechRepublic, Startup Daily, and Dynamic Business.
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