Home loan approvals growing again

Data released today by the Australian Bureau of Statistics (ABS) revealed that home loan approvals grew by 0.04 per cent in May after two consecutive months of negative growth.

Loan Market director Mark De Martino said the numbers for May were 4.57 per cent higher than the same month last year and it demonstrated how competitive the market for home loans is.

“The record low cash rate is certainly fuelling segments of the market but with only one rate cut in the past twelve months, it’s impressive to see the market growing with the absence of lowering interest rates,” he said.

Mr De Martino said the Reserve Bank of Australia would be monitoring ABS home loan approval numbers closely and these results would likely strengthen their position to keep interest rates low for the foreseeable future.

“The RBA’s wait-and-see approach for interest rates appears to be working and it’s clear that interest rates are exactly where they need to be to keep homeowners and buyers active in the market.”

Mr De Martino said it was up to lenders to continue making the right competitive moves while the RBA used the cash rate to balance the economy.

“Lenders have had to move rates independently of the cash rate to attract new customers and products such as fixed rates have been an area of strong competition. The spread of interest rates between fixed and variable products is as high as 1.7 per cent between the core lenders on our panel.”

Mr De Martino said that a New South Wales and Queensland were showing particularly strong May numbers compared to the previous year.

“Queensland is showing the strongest May resurgence from last year at 9.74 per cent and New South Wales is right behind at 6.53 per cent. These are great numbers to see for two states that went through some difficult economic periods in the past year.”

Mr De Martino said that the approval numbers were incredibly close with 0.04 per cent monthly grow equalling only 21 home loans nationally.

 

State MoM May 2014 vs 2013
NSW 1.28% 6.53%
VIC -1.12% 2.82%
QLD 3.28% 9.74%
SA 1.50% 5.38%
WA 0.19% -0.62%
TAS -7.65% 6.21%
NT 9.83% 7.95%
ACT 2.79% 3.98%
National                0.04%               3.98%