Demand for home loans dropped off in August, according to new data from the Australian Bureau of Statistics (ABS).
The latest housing finance data reveals 51,787 loans were approved in seasonally adjusted terms over August – down 0.9 per cent from the 52,238 loans written last month.
Similarly, the number of loans approved for the construction of dwellings slid 0.8 per cent over the month of August, while the number of loans approved for the purchase of established dwellings fell 1.1 per cent.
However, the number of loans approved for the purchase of new dwellings increased by 2.5 per cent.
Mortgage Choice spokesperson Jessica Darnbrough said that despite the relatively flat result the property market continues to be incredibly strong, with prices climbing month on month.
“Research conducted by RP Data in September found capital city dwelling values climbed 4.2 per cent higher over the three months of winter – marking the strongest capital gain for that season since 2007,” Ms Darnbrough said.
“Unsurprisingly, Sydney and Melbourne were largely responsible for the significant growth in property values, with the capital cities recording dwelling value growth of 5.0 per cent and 6.4 per cent respectively,” she said.
Moving forward, Ms Darnbrough said while the property market will continue to be relatively strong in terms of values, she wouldn’t be surprised to see the demand for home loans remain flat.
“While spring is a notoriously hot season for the property market, preliminary data shows values climbed just 0.1 per cent in September, which could mean demand for properties simply isn’t as strong as it has been in previous months,” she said.
“In addition, the Reserve Bank of Australia has made it clear that certain measures may need to be taken in the future in order to cool the hot property market.
“And while no measures have been implemented as yet, the Reserve Bank’s decision to talk publically about the possibility of introducing certain restraints could encourage potential borrowers to delay their property purchases.”