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Mortgage Choice chief executive John Flavell says changes to investor lending are failing to have a significant impact on home loan demand.
According to the July housing finance data from the Australian Bureau of Statistics, 53,095 home loans were approved over the course of the month – up 0.3 per cent on the month prior.
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The total value of all dwelling commitments was also up, with more than $32 billion in home loans written throughout July.
Mr Flavell said the spike in home loan demand and value of dwelling commitments was interesting, especially given the current market conditions.
“Over the last few months, Australia’s lenders have made some sweeping changes to their policy and pricing in a bid to reduce their level of investment lending,” he said.
“As such, you would expect these changes to have some impact on the level of investment demand. But, according to [this week’s] data at least, the changes seem to have had little to no impact on the level of demand.”
However, Mr Flavell noted that “it is still early days”.
“Considering most of the changes were made in June and July, we are unlikely to see the true impact of these changes for some months yet,” he said.
Commenting on the 1.5 per cent spike in the value of all loans written over July, Mr Flavell said the result wasn’t surprising given that property prices across the combined capital cities continue to rise.
“Data from CoreLogic found property values actually climbed 2.8 per cent across the combined capital cities over the month of July,” he said.
“Sydney and Melbourne were once again the standout performers, with the two capital cities recording property price growth of 3.3 per cent and 4.9 per cent respectively.”
With property prices continuing to rise quite quickly month after month, Mr Flavell said “there is little wonder” why we are seeing growth in the value of all loans written.
[Related: Aggregator takes issue with APRA]
