Home loan approvals fall further

Wednesday 10 February 2010

Article by Mozo

Home loan approvals fell for a third consecutive month in December, reflecting dwindling confidence among potential new home buyers.

Australian Bureau of Statistics data shows that finance commitments for owner-occupied housing fell by 5.5 per cent in the month, the Australian Associated Press (AAP) reported.

In addition, total housing finance by value fell by 2.8 per cent in December.

NAB senior economist David de Garis told the AAP that the decline in approvals for home loans was expected after the federal government’s decision to reduce buying stimulus measures and increase interest rates during the final quarter of 2009.

The government cut the first home buyers grant from $21,00 to $14,000 on October 1st last year and reduced it further to $7,000 on January 1st.

Such a reduction in government support may prompt Aussies to compare home loans in search of the best financing options. Last week, the Herald Sun reported that a range of smaller lenders are set to take on the major banks in the home loan market.

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