Home loan data suggests spike in refinancing

Home loan demand improved slightly in April, new data from the Australian Bureau of Statistics has found.

According to the latest data, 57,576 home loans were written through the month of April – up 1.7% on the previous month. 

However, while the number of home loans written throughout the month was up, the value of home loans written was down substantially on the month prior. 

“The value of all dwelling commitments written through April was $31.99 billion – down 1.8% on March,” Mortgage Choice chief executive officer John Flavell said. 

“This data would suggest there is a lot of refinancing activity taking place at the moment.”

But despite the 1.8% drop in the value of all dwelling commitments, Flavell said the fact that there was an increase in overall home loan demand would suggest the property market remains relatively robust.

As per the data, the number of loans written for the construction of dwellings was up 4.4% from last month, while the number of loans written for the purchase of new dwellings was up 3.3%.

“The number of loans written for the purchase of established dwellings was also up – climbing 1.3% throughout April,” Flavell said. 

“This level of growth is quite impressive and serves to highlight how strong the Australian property market continues to be.

“Over the months ahead, I would expect home loan demand to remain strong, especially as the latest round of home loan interest rate cuts start to filter through the market.

“With many of Australia’s lenders passing on the Reserve Bank’s rate cut in May, the cost of borrowing has become more affordable than ever before – which will help to keep heat in the market.”

Article from: Australian Broker