Natural disasters worked to dampen property buying activity in January with new data revealing a plunge in new home loan approvals over the month.
According to data from the Australian Bureau of Statistics, the number of loans granted to build or buy houses and apartments dropped for the first time in seven months in January, falling 4.5 per cent compared to December.
ANZ economist David Cannington said the drop in demand could be largely attributed to the spate of natural disasters experienced earlier this year.
Demand for loans in Queensland plunged 16 per cent as the state’s devastating floods and cyclone Yasi took their toll.
“The initial impact of the recent floods weakened housing finance activity,” Mr Cannington, wrote in a report.
But while the Queensland floods cannot be underestimated, mortgage approvals also dropped 5 per cent in Victoria, 4 per cent in NSW and 2.3 per cent in Western Australia.