Mortgage applications in Australia have dropped to an eight-year low, as high housing prices and increasing interest rates hit the home loan market.
The number of mortgage applications by Australian home buyers slipped 19 percent in 2010, according to research by credit agency Veda Advantage.
Australians are now making lesser mortgage applications than at the peak of the global recession.
Application numbers had surged in 2009 as stimulus measures by the federal government helped to strengthen the market “before winding back” in 2010.
Despite the falling number of mortgage applications, the balance of home loans in Australian bank books exceeded $1 trillion for the first time, in December.
Based on data published by the Australian Prudential Regulation Authority, households owed banks AU$1,000.1 billion as of end December, higher than the AU$992 billion as of end November.
The Commonwealth Bank trailed competitors following its move to raise its standard variable mortgage rate by 0.45 percentage points in November. Without its Bankwest subsidiary, the bank’s mortgage book grew only 0.3 percent in December to AU$251.6 billion.
The National Australia Bank (NAB) again saw the strongest mortgage growth, with its book growing 1.3 percent to AU$156.8 billion.
The publication of the data was part of a study by market research group Forebrand and found NAB the most favourable for interest rates, among customers of major banks.
ING Direct was considered the “most price-competitive lender” outside the major banks.