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Home loan demand rose in October, according to new data from the Australian Bureau of Statistics, following two months of decline.
The latest housing finance data from the ABS reveals that, in seasonally adjusted terms, 52,654 home loans were approved throughout October — an increase of 2.2 per cent on the month prior.
It reveals that $30 billion worth of dwelling commitments were made, up by 2.6 per cent over the month prior. This included an increase of 3.5 per cent in owner-occupier value to $20.1 billion and a 0.6 of a percentage point value increase in investment loans to $9.8 billion.
Mortgage Choice CEO Susan Mitchell said that the data is positive.
“In October, we saw a welcome lift in the number and value of home loans approved,” she said.
“The previous month’s data revealed the weakest value of dwelling commitments in four years. While October’s unexpected results could signal a reversal in the recent softening in approvals, it is important to consider the volatility in monthly data comparisons.”
Ms Mitchell also pointed out that the data revealed the first increase in investment loan value since February.
“The encouraging result may suggest that APRA’s lifting of the benchmark on investment lending is starting to have an effect on demand for investment loans.
“The recent decline in housing finance approvals may be attributed to the meticulous level of scrutiny lenders are applying to new home loan applications, which has increased the length of time it is taking for home loans to progress from application through to approval.”
Ms Mitchell said that it remains to be seen whether demand will stabilise.
“Looking ahead, a sustained decline in house prices should continue to support home loan demand into the New Year.
“In fact, the most recent Hedonic Home Value Index from CoreLogic revealed an annual fall of over 4 per cent, led by annual falls of over 8 per cent and over 5 per cent in Sydney and Melbourne, respectively.”
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