Home loan uptake increases for fourth consecutive month.
Article by Mozo
According to the Australian Bureau of Statistics (ABS) home loan uptakes have risen by 0.8 percent in April, the fourth consecutive month of growth for the market.
However, with interest rates in a downward cycle and currently at a record low of 2.75 percent, economists had forecasted for up to 2 percent growth, compared the 0.8 percent that was recorded, reports the News Limited Network.
According to JP Morgan economist Ben Jarman the housing finance data reflects a grinding improvement in the economy in response to low interest rates.
"Housing commitments are up four months in a row, and this continued the theme of new loan signings going OK, but being offset by faster repayments by existing mortgage holders. So that's keeping the overall credit pool fairly stagnant," Mr Jarman said.
According to Commonwealth Bank senior economist Michael Workman, the tone of the data is pretty modest but is inline with the current soft consumer confidence levels.
"The tendency is still for people to pay down existing debt rather than take on new debt," he said.
Despite views that the growth in the housing industry is slow or even to late, the figures are a sign that the market is certainly in a state of recovery. Low interest rates are sparking intense competition amongst lenders who have aggressively cut rates and many economists including Mr Jarman believe the the Reserve Bank of Australia will likely cut rates even further in 2013.
This all adds up to being one one of the best pest periods in a long time for Australians to save on their mortgage, with the right loan. Those looking for a better rate can compare home loans here.
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