The ABS housing finance data for July suggests home loan demand could rise further still in the next few months, Mortgage Choice CEO Susan Mitchell says. 

The latest data (5601.0) from the ABS reveals that, in seasonally adjusted terms, there was a significant increase in the number and value of home loans to owner-occupiers over the month of July, following a rise in June.

According to the ABS, 48,662 home loans to owner-occupiers were approved throughout the month of July – an increase of 5 per cent on the month prior.

At a glance: 

• Housing finance data from the Australian Bureau of Statistics has revealed a surge in demand for home loans to owner-occupiers for July, increasing 5 per cent from June.
• There was also an increase in the value of home loans written to owner-occupiers, which rose to $19.5 billion.
• The number of loans to first home buyers grew 15 per cent on the month prior.

 Ms Mitchell said the surge in demand suggested that home buyers had reacted strongly to back-to-back rate cuts from the Reserve Bank.

"We continue to see encouraging signs from the property market, with the latest CoreLogic Hedonic Home Value revealing that national dwelling values recorded the first rise in nearly two years and auction clearance rates are posting strong gains particularly in the nation’s two largest markets, Sydney and Melbourne," she said.

“As we enter the Spring selling season, all eyes will be on sellers who are yet to match buyer enthusiasm in Sydney and Melbourne with listings down 20% and 8% respectively year-on -year."

This is the second successive month in which the value of lending increased, while there was also an increase in the value of home loans written to owner-occupiers, rising to $19.5 billion in July.

Value of home loans to owner-occupiers (excluding refinance) rose 5 per cent in July, as did the value of loans to investors (excluding refinance), which increased almost 5 per cent over the month of July to $7.2 billion. 

Ms Mitchell said much of data reflected a sense of confidence in the property.

“The number of loans to first homebuyers grew in July, rising 15 per cent on the month prior," she said.

"This lift was supported by a 20 per cent lift in the value of loans to first homebuyers.

"The ABS data shows that first home buyers made up almost 30% of owner-occupier commitments.

"This suggests they are feeling more confident about the property market, given that dwelling values seem to have found a floor, consecutive rate cuts from the Reserve Bank have pushed home loan interest rates to all-time lows, and the lowering of serviceability floor rates has increased the borrowing capacity for some borrowers."

Click here to view the July ABS statistics.

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