Demand for home loans dives again

Australian Bureau of statistics data on Wednesday showed that just 48,260 home loans were granted in March, a 3.4 per cent seasonally adjusted decline from February.

This was the smallest amount of home loans granted in one month in nine years, and was roughly in line with the 3.0 per cent decline forecast by economists.

The proportion of first home buyers taking up a loan dropped to 16.1 per cent in March, the smaller amount since April 2008.

This was down from 18.1 per cent in February and a record 28.5 per cent set in May last year when the federal government’s more generous first home owners grant was in full swing.

The Reserve Bank of Australia has raised the cash rate twice since March to 4.5 per cent – a total of six increases since October last year – and money markets are expecting further hikes to at least five per cent before the end of the year.


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