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The latest figures from the Australian Bureau of Statistics show that demand for both owner-occupied and investor home loans remains strong.
The ABS housing finance data shows that overall home loan demand rose by 2.1 per cent in November 2017, with 56,876 home loans approved throughout the month.
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Despite concerns over reduced housing market activity in some of Australia’s capital cities, November mortgage demand marked the fifth consecutive month in which residential loans written surpassed 55,000.
Mortgage Choice chief executive officer John Flavell has attributed the rise to continually low interest rates.
“The last time we saw this kind of prolonged period of strong home loan demand was back in February 2016,” the CEO said.
“[The] data would suggest the property market is robust, driven in large part by record low interest rates.”
In the month of November, a total of $33.5 billion in residential loans were written, which signalled a 2.3 per cent increase from the previous month.
The value of both owner-occupier and investment loans written surged in November, where owner-occupier loans increased by 2.7 per cent to $21 billion, while the overall value of investment loans jumped by 1.5 per cent to over $12 billion.
The Mortgage Choice CEO believes that the Reserve Bank of Australia will not lift interest rates above 1.50 per cent anytime soon. He also predicts that a lack of movement in the cash rate will drive further growth in mortgage demand.
“[The RBA’s decision] has helped to keep the cash rate low and borrowing at affordable levels,” Mr Flavell said.
“Looking ahead, expectations are that interest rates will remain lower for longer. As such, I believe we may see continued strong home loan demand.”
[Related: Fixed rate demand continues to fall]
