subscribe to our newsletter
Home loan demand continues to fall

Home loan demand continues to fall

New figures by Veda show that overall demand for home loans has declined for the fourth consecutive quarter, with only the ACT and Victoria seeing an increase in mortgage applications over the three months to June.

The Veda Quarterly Consumer Credit Demand Index found that overall demand for mortgages has continued to cool over the last 12 months, from an annual growth rate of 13.6 per cent in the June quarter of 2015 to just 3.2 per cent over the same quarter this year.

Mortgage applications fell in all states except the ACT and Victoria in the June quarter, where applications grew by 6.1 per cent and 2.8 per cent respectively. However, mortgage applications in Victoria have eased significantly, down from an annual growth rate of 14.5 per cent experienced in the June 2015 quarter, according to the Index.

Veda reported the sharpest decline in mortgage applications in the June quarter was in the NT (-14.3 per cent), where mortgage applications have continued to decline since the December quarter 2014. WA (-12.1 per cent), Tasmania (-11.5 per cent) also saw significant falls, followed by NSW (-5.2 per cent), Queensland (-3.3 per cent) and SA (- 0.7 per cent).

Angus Luffman, Veda’s general manager of consumer risk, said historically, movements in Veda mortgage applications have tended to lead movements in house prices by around six to nine months, with mortgage applications a good indicator of home buyer demand, and an excellent indicator of housing turnover.

“Regulatory driven changes to investor mortgages, implemented in the middle of last year have contributed to the cooling of mortgage demand over the past 12 months,” he said.

"The continuing weakness being seen in Veda’s mortgage applications data suggests the housing market will remain subdued for the foreseeable future."

[Related: Major bank satisfaction hits three-year low]

Home loan demand continues to fall
mortgagebusiness logo

Latest News

A regional bank has revealed its full-year 2018 financial results, reporting a fall in residential mortgage settlements amid “challenging...

Former prime minister John Howard has called on the financial services royal commission to “bear in mind the stability and contribution”...

Macquarie Group has secured a stake in Investa Office Fund (IOF) months after Blackstone submitted a $3.1 billion takeover proposal. ...

FROM THE WEB

podcast

LATEST PODCAST: Cash rate to remain unchanged, corporate cops for the banks and a new type of credit card

Do you expect access to credit to get harder this year?