Home loan approvals in Australia witnessed a 20 percent increase in January and February, according to Dean Rushton, Chief Operating Officer at Loan Market.
He noted that despite a recovery in mortgage activity, the floods in Australia and the increase in interest rates experienced in the past year ensured comparatively low consumer confidence.
“It’s encouraging to see some improvement in our figures but consumer confidence is still markedly subdued,” Mr. Rushton said.
The Australian Bureau of Statistics revealed that mortgage approvals in Queensland fell 16.4 percent in January. However, Mr. Rushton is optimistic that this can be improved with the ongoing recovery programme in Queensland.
Loan Market stated that mortgage approvals in Queensland decreased 40 percent from January to December but recovered by 44 percent in February.
As the residential property market is expected to recover over the next few years, interest rates on mortgages will also rise again. Some of these requirements will include a higher down payment and higher interest rates on home loans.
Adam Carr, Senior Economist at ICAP, said it is fairly obvious that the natural disaster in Queensland has hampered recent home loan figures.