Home loan demand eases, prices to follow

Colin Brinsden, AAP Economics Correspondent
(Australian Associated Press)

Latest figures show demand for new mortgages is in decline, suggesting a calmer housing market can be expected in coming months.

Data from credit information provider Equifax has found mortgage applications fell at an annual rate of 0.9 per cent as of the June quarter, including softening demand in the hotspots of NSW and Victoria.

Equifax’s Angus Luffman says this is the second consecutive quarter of easing growth in mortgage applications and the beginning of a downturn across all states and territories.

“Any debate about whether the housing market is softening should now be put to rest,” he said on Wednesday.

Historically, movements in Equifax data have led movements in house prices by about six to nine months.

In contrast, Equifax’s separate consumer credit demand index, which measures demand for personal loans and credit cards, jumped 10.3 per cent higher in the June quarter compared to a year earlier.

Credit card applications rose 2.3 per cent, while personal loans surged by 18.4 per cent.

However, Mr Luffman said despite the increase in loan applications, personal credit balances, excluding housing, have remained flat for a number of years.

“Given the current subdued growth in household incomes, and below-neutral consumer sentiment, it is understandable that Australians may be becoming more circumspect in their use of consumer credit products,” Mr Luffman said.


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