Demand for home loans reaches eight-month high

The demand for home loans across Australia reached an eight-month high in December, new figures have revealed.

According to the Australian Bureau of Statistics, the number of property loans taken out during the month stood at 48,453 – a month-on-month rise of 2.3 per cent.

This was the biggest monthly uptake since May 2011 and much of the increased demand was attributed to the strong property market in New South Wales.

Despite the fact that the most recent World Cost of Living Survey discovered that Sydney was among the most expensive places to live on the planet, people still clamoured to buy new houses in the city towards the end of 2011.

Kartrina Ell of Moody's believes that one factor behind the sudden upturn was the introduction of stamp duty payments, which came into effect on 1st January. Many Aussies were keen to avoid this extra expense, which helped force through extra sales in December.

Two consecutive cuts to interest rates in November and December may also have had a positive impact on the property market.

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