Mortgage approvals have dropped for the first time this year, with falls in housing finance commitments across the board in March.
The latest housing finance figures released by the Australian Bureau of Statistics (ABS) show total value of dwelling commitments fell 1.1 per cent in seasonally adjusted terms in March.
New dwellings commitments also fell by 1.6 per cent, seasonally adjusted.
The seasonally adjusted series for the total value of owner occupied housing commitments fell 1.2 per cent in March, while new dwellings commitments also fell by 1.6 per cent.
This is the first drop in overall home loan approvals that we have seen this year, Mortgage Choice spokesperson Jessica Darnbrough said.
“That said, the housing market remains very buoyant and has emerged as one of the key areas of strength in our economy.”
Increasing property prices suggest demand for this type of asset is still incredibly strong and will remain so while rates hover around historical lows, she said.
“Research conducted by RP Data shows dwelling values across Australia’s capital cities rose 3.5 per cent over the first quarter of this year, which is very impressive growth.”
However, the proportion of first home buyer housing finance commitments remains significantly lower than the long-run average.
Real Estate Institute of Australia (REIA) president Peter Bushby said that while first home buyer mortgage commitments grew marginally in March, the segment is still a concern.
“The proportion of first home buyers in the number of owner-occupied housing finance commitments increased marginally to 12.6 per cent compared to 12.5 per cent in February and the low point of 12.3 per cent in November 2013,” My Bushby said.
“This is still dramatically lower than the long-run average proportion of 19.9 per cent and continues to be of concern.”