Demand for mortgages hit an eight-year high in December, according to new figures released by the Australian Bureau of Statistics.
A total of 58,552 home loans were approved during the month – up 2.6 per cent from 57,081 in November.
Mortgage Choice chief executive officer John Flavell said the last time more than 58,500 home loans were approved in one month was in January 2008.
“December was an incredibly strong month in terms of home loan approvals. The fact that we haven’t seen this level of demand for home loans since 2008 is a testament to the ongoing strength of the property market,” he said.
“Pleasingly, the data shows that all parts of the market improved over the month of December. The number of dwelling commitments approved for the construction of new dwellings was up 1.8 per cent, while the number of loans written for the purchase of new dwellings and the purchase of established dwellings were up by 12.4 per cent and 2.1 per cent respectively.”
The ABS data showed the total value of all home loans written grew by 0.8 per cent.
“In December, more than $33.5 billion worth of home loans were written,” Mr Flavell said. “The value of all investment loans written was up 0.6 per cent, while the value of all owner-occupied home loans written was up by 0.9 per cent.”
But while it was pleasing to see a spike in both the value and number of home loans written over the month of December, Mr Flavell said the sudden surge in activity was not altogether surprising.
“At Mortgage Choice, we know from our own data that December is a traditionally hot month in terms of home loan settlements, as Australians are keen to finalise their property plans before the New Year commences,” he said.
Mr Flavell added he is confident that the property market will remain robust over the coming months.
“Interest rates continue to sit at record lows, making the cost of borrowing more affordable than it has been in a long time," he said. "As such, we should continue to see a steady stream of buyers entering the market looking to take advantage of the current rate environment.”