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Demand for home loans has fallen for the fourth month in a row, data from the Australian Bureau of Statistics indicates.
The latest finance data found that 53,017 home loans were approved in March, down 2.2 per cent from the previous month.
Mortgage Choice CEO Susan Mitchell said that there was a tumble in home loans and in the value of current commitments.
“Not only did the number of home loans approved take a tumble, but there was also a decline in the value of all dwelling commitments,” she said.
Ms Mitchell said that the data showed a decline from February for both current commitments and the value for loans.
The data shows that $31.9 billion worth of dwelling commitments were made over March, a decline of 4.4 per cent from February.
“The value of investment loans saw quite a significant drop, falling 9 per cent to $10.9 billion in February. Similarly, the value of owner-occupied housing loans fell 1.9 per cent to $21 billion,” she said.
Ms Mitchell said that the decline of home loans isn’t surprising given this data.
“The decline in home loan approvals and the value of dwelling commitments isn’t a surprise as this correlates with what we’ve been seeing in the housing market at the moment,” said Ms Mitchell.
However, Ms Mitchell stressed that home loan approvals remain strong historically and that, with low interest rates, it was still a good time to buy.
“While we have seen a slight drop, home loan approvals remain strong by historical standards.
“Interest rates remain at historically low levels, so it is a good time for home buyers to achieve their goal of property ownership,” she said.
Additionally, the regulation authority made some changes which could see a return of property investors said Ms Mitchell.
“The Australian Prudential Regulation Authority announced in April that it was scrapping its 10 per cent cap on investment loan growth and this may mean that we see property investors make a comeback.”