Home loan approval data released by the Australian Bureau of Statistics (ABS) on Lending Indicators has shown that the value of home loan approvals has plunged dramatically. Specifically, the value of loans has dropped by 11.6% to $16.4 billion in May. This marks the largest drop in the 18-year history of the series.
This dramatic plummet has been attributed to a fall in demand for owner-occupier loans in both Victoria and NSW, as the value of new loans has decreased by 6.8% to $4.1 billion and 18.7% to $4 billion, respectively.
The number and value of home loan commitments for current residences fell significantly, which reflects the impact of lockdown restrictions on open for inspections and auctions, as a result of COVID-19. This is also having a flow on effect for the new housing and construction sector.
Despite home loan lending dropping and falling house prices, refinancing of home loans has increased, up by 29.1% to $21.7 billion. Borrowers have “responded to reduced interest rates and refinancing offers”, such as refinancing existing owner-occupier loans with different banks, ABS chief economist Bruce Hockman stated.
With interest rate cuts, and historic low mortgage rates, now is the time to consider your current debt structures. The lending advisors at Partners Wealth Group are available to review your current loans to ensure you have the right home loan for you, and your circumstances.
They understand that during this current economic climate clients may be facing financial hardship. They are here to help and have had a lot success lately in negotiating lower rates for clients with certain lenders. Contact a lending advisor from Partners Wealth Group today on 1800 333 143 for a complimentary home loan review.
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