New data from the ABS has revealed demand for home loans dropped for the second consecutive month during March.
The latest housing finance data from the Australian Bureau of Statistics found 54,468 home loans were approved during the month of March, down from 54,736 the previous month.
According to Mortgage Choice chief executive officer John Flavell, this is the second consecutive month that a decline has been seen in the number of home loan approvals.
“Over the last few months, a number of lenders have made significant changes to their policy and pricing, which would have had an impact on demand,” Mr Flavell explained. “And while home loan demand has slipped slightly in recent months, it remains strong by historical standards.”
While total home loan demand eased by 0.5 per cent in March, the value of all dwelling commitments rose by 0.9 per cent to more than $33.1 billion.
Mr Flavell said he wasn’t surprised to see a lift in the value of all home loan approvals.
“Data from CoreLogic found property values across the combined capital cities rose 1.4 per cent over the month of March, taking the median dwelling price to $585,000," he noted.
“Unsurprisingly, this growth in dwelling values was largely supported by rising property prices in both Sydney and Melbourne, with the capital cities recording dwelling price growth of 1.4 per cent and 1.9 per cent respectively throughout the month of March.”
Home loan demand is likely to remain strong despite the various changes being implemented by Australia’s lenders, Mr Flavell says.
“The fact is: interest rates continue to hover around record lows… there will continue to be a fair degree of heat in the property market, which will help bolster demand and property values,” he concluded.