Home loans demand has "surged"

There has been a significant increase in the demand for low interest home loans, it has been claimed.

According to Westpac’s Australian Housing Finance report, historically low interest rates and government stimulus have contributed to the upsurge.

The bank noted the number of home loans to owner-occupiers increased by 5.1 per cent last month, representing a 47 per cent rise since August 2008.

Commenting on the developments, Andrew Hanlan, senior economist at the institution said: "Demand for housing finance has surged, reversing the sharp decline over the first half of 2008.

"Additional government incentives for first home buyers … and extremely low interest rates have ignited pent-up demand."

Furthermore, the study highlighted improvements in construction, with finance for this sector jumping by eight per cent.

Westpac stated the building of new housing stock will "boom" throughout 2010.

Earlier this week, news.com.au stated new Australian Bureau of Statistics figures revealed people purchasing their first property are rushing to get hold of home loans before the First Home Buyer Grant is phased out.

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