Decline in new builds affects home loan demand

Those looking to compare home loans ahead of moving house may be searching for finance to help them buy an older property, as new figures have revealed a decline in new build projects and home loans.

Data from the Housing Industry Association (HIA) has shown the number of loans granted for construction was down 9.4 per cent in January when compared with figures for the previous month.

As a result, the number of mortgages issued to those buying new properties was also lower, dipping by 13.5 per cent.

Dr Harley Dale, chief economist at the HIA, explained the decline highlights the need for interest rates to be held.

He was quoted by the Queensland Business Review as saying the housing market as a whole "is performing below par in 2011".

Consumers seeking a home loan may be tempted by an offering from Ubank, the web-based arm of the National Australia Bank, which recently cut the interest rate of its online product to 6.99 per cent.

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