Mortgage Choice : Home loan demand rises for third consecutive month

Home loan demand rose for the third consecutive month, according to new data.

The Australian Bureau of Statistics' Housing Finance data showed 56,464 home loans were approved over the month of July, up 2.9% from the previous month.

'July was the third consecutive month of growth for home loan approvals,' Mortgage Choice chief executive officer John Flavell said.

'Historically low interest rates are helping to keep heat in the property market and borrowers are clearly keen to take advantage of this.'

While the number of home loan approvals rose, the value of dwelling commitments fell 0.9% to $33.03 billion over the month of July.

'This can be attributed to the drop in the value of investment loans approved.

'During the month of July, $12.06 billion in investment loans were approved - down 3.9% from the previous month.

'I am not surprised to see a downwards shift in investment demand. Over the past few months, we have seen a number of Australia's lenders tweak their pricing and policy in this area. These changes have made it hard for some investors to qualify for finance.

'That said, we did see the total value of owner-occupied housing loans written rise 0.9% to $20.96 billion over July.

'This is not surprising as the banks have recently been reducing the rates on their owner-occupied principal and interest home loan products and there are some competitive deals to be found.'

Looking ahead, Mr Flavell said he expected home loan demand to be strong.

'We are now in spring, which is generally the busiest period for the property market, so I would expect to see home loan demand remain robust,' he said.

'Interest rates remain at historically low levels and this is helping to keep the cost of borrowing low.

'Furthermore, we have been seeing increased competition in the market with banks, lowering the rates on their owner-occupied home products.

'This is good news for anyone looking to buy a property or refinance their home loan in the not too distant future.'