Mortgage inquiries in Australia have picked up for the first time in two years, an early indicator that home prices in the country are set to recover in the coming months.
According to research by leading data provider Veda, home loan inquiries climbed 1.5 percent in the year ending March, the first time it increased since the onset of the global financial crisis in 2008.
“Turning points in mortgage inquiries usually occur one to three quarters ahead of turning points in house prices,” said Angus Luffman, Head of Consumer Risk at Veda.
“This is a trend to watch, particularly if you are hoping for a future pick-up in house prices.”
However, there were significant differences in loan demand between states during the first quarter of 2012. Western Australia witnessed an increase of 7.6 percent but New South Wales plummeted by 7.6 percent following the expiration of the stamp duty exemption at the end of last year.
Overall, credit demand dropped 4.8 percent in the year to March, with personal loan and credit card applications falling 1.4 and eight percent respectively.
“Australian households have spent the post-GFC period firmly in saving rather than spending mode, and the results show consumers are still cautious about taking on credit,” said Luffman.
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