DEMAND for new home loans has fallen by nearly 8 per cent in January 2010. The climate of rising interest rates and the end of the Federal Government’s more generous first home buyers grant has greatly impacted on this trend.
In January owner occupiers were approved for 51,056 home loans . This represents a 7.9 per cent seasonally-adjusted decline on the December 2009 figures , according to Australian Bureau of Statistics data released today.
In fact this is a decline for a 4th month in a row..
Economists had expected home loan commitments to have risen by 2.0 per cent.
The fall follows December’s third consecutive increase in mortgage rates and the end of the Government’s increased grant, which returned to $7000 on January 1.
The proportion of loans granted to first homebuyers slipped to 20.5 per cent compared to 21.0 per cent in December.
A record peak of 28.5 per cent was set last May.
The Reserve Bank of Australia raised the official cash rate for a fourth time to 4.0 per cent last week. There are predictions that rates could go up by anywhere from 0.5% to 0.75% by the end of the year.