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More and more Australians are looking to borrow money to purchase property, according to a new report.
The latest Veda Quarterly Consumer Credit Demand Index showed that mortgage demand rose to 12.5 per cent in the June quarter – up 5.9 per cent from the previous 12 months, and up from 5.5 per cent in the March quarter.
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New South Wales experienced the largest growth in mortgage applications at 21.0 per cent, while the ACT recorded the next largest at 19.5 per cent.
This was followed by Victoria at 13.3 per cent, Queensland at 11.7 per cent and South Australia at 8.1 per cent.
Growth was relatively flat in Tasmania at 0.6 per cent, while mortgage demand fell in Western Australia and the Northern Territory by by 5.3 per cent and 4.9 per cent respectively.
“Overall, Veda’s latest credit demand data suggests that strength in interest rate sensitive sectors, such as retail and in the housing market, is continuing, which should help to support growth as Australia’s economy responds to the downturn in mining-related construction,” Veda’s general manager of consumer risk, Angus Luffman, said.
“Two interest rate cuts by the Reserve Bank [in the first half of 2015] drove mortgage applications to pick up strongly. The strength in mortgage applications suggests there is still some strong interest from buyers in the housing market.”
Mr Luffman said some of the growth in mortgage demand is due to consumers switching between providers, as a low interest rate environment encourages consumers to shop around for a better home loan deal.
[Related: FHB investment demand surges]
