Home loan demand declines for fifth consecutive month
Mortgage demand fell for the fifth consecutive month in February as rising interest rates and tighter lending conditions discouraged potential borrowers.
New Australian Bureau of Statistics (ABS) data shows that only 50,287 mortgages were granted to owner-occupiers in February, down by a seasonally-adjusted 1.8 per cent compared to January.
In addition, the ABS found that the total value of dwelling finance commitments, excluding alterations and additions, fell by 2.1 per cent in February.
ICAP economist Adam Carr told news.com.au that with fewer Aussies inclined to compare home loans and invest in property, the Reserve Bank may soon decide to slow its current policy of raising interest rates.
Referring to the ABS data, he said: "It’s pointing to a sharp, broad-based decline in lending activity. That would suggest to me that we’re getting to the point where the pace of rate hikes will slow, markedly."
Meanwhile, recent research by the Australian found that Australia’s major banks are continuing to raise their home loan rates above the official cash rate, suggesting that mortgage costs could soon reach the peaks seen during the economic boom.
This article is brought to you by Mozo – Helping you compare home loans