The first quarter of 2012 has seen a welcome improvement in the number of home loan approvals nationwide with the recent reduction in interest rates set to further boost the sector, says leading mortgage broker Priority Lending.
Priority Lending corporate spokesperson Paul Smith said the latest Australian Bureau of Statistics (ABS) figures for March, 2012, show a modest 0.34 per cent rise in the number of home loan approvals from February, 2012.
But Mr Smith said the national results for the March quarter 2012 were 10 per cent up on the corresponding quarter in 2011 with all states and territories on the mainland on the rise. Only Tasmania bucked the trend.
Western Australia and Queensland had quarterly increases of 25 per cent and 16 per cent respectively, while the Northern Territorywas up 18 per cent and NSW 11 per cent. There was a four per cent increase in South Australia, three per cent in the ACT and two per cent in Victoria. Tasmania had an eight per cent decrease.
“It’s highly encouraging to see the market on the mainland make a comeback after a prolonged downward trend,” Mr Smith said.
“We are obviously seeing more confidence from consumers so far this year, compared to last, which augers well for the months ahead.”
Mr Smith said this month’s lowering of official interest rates by the Reserve Bank of Australia (RBA) from 4.25 per cent to 3.75 per cent would also have an impact on the home finance market in the coming months.
“With two consecutive months of flat activity, we should see the figures for May and June spike in reaction to the RBA’s rate cut,” he said.
”Even though most lenders held back on passing on the full 50 basis points, they still lowered their variable rates by significant margins in a positive move for home loan customers.
“The rate cut will also help revive stalled sectors such as retail that were clearly in need of some stimulus.
“There may be further rate cuts by the RBA which can only be beneficial to sectors such as retail and housing.”
ABS Housing Finance – March quarter 2012 compared to March quarter 2011
WA – plus 25%
QLD – plus 16%
NT – plus 18%
NSW – plus 11%
VIC – plus 2%
SA – plus 4%
ACT – plus 3%
TAS – minus 8%
Source: Priority Lending