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ISCOVER
Staff Reporter
After years of sluggish credit demand, it seems credit growth is now officially on the rise.
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According to Veda’s Quarterly Credit Demand Index, overall mortgage enquiries increased by 1.8 per cent in the March quarter, with an underlying trend that has now seen four consecutive months of increased mortgage application demand.
The report found this trend has been driven by strong improvements in NSW and continued strength in WA.
But while mortgage enquiries are now lifting, the current growth rate remains very weak relative to the growth seen in previous housing market upturns.
Mortgage enquiries were strongest in WA, which saw a 12.7 per cent lift in demand, followed by NSW, which enjoyed a 5.1 per cent boost.
“The good news is that mortgage enquiries are still lifting slowly, which indicates that the current upturn in house prices is likely to have further to run. House prices are being supported by low interest rates, improvements in affordability, and solid population growth,” Veda’s general manager of consumer risk Angus Luffman said.
Veda’s data historically shows that mortgage enquiries are a good indicator of homebuyer demand and an excellent indicator of housing turnover, with movements in mortgage enquiries tending to lead movements in house prices by around six to nine months.
