Australians have made more mortgage applications during the June quarter than in the March quarter. According to a report by Veda Advantage, Home Loan applications were up by 2.3 per cent in the June quarter. Whereas consumer demand for unsecured credit has dropped with credit card application numbers being down by 9 percent.
While we have seen a minor increase in demand for mortgages over the past three months, the results over the past 12 months are showing a home loan application drop of 20.3 per cent compared with the June 2009 quarter. The most significant reason for the lower numbers on an annual basis is the changes introduced by government to the First Home Buyer Entitlements. As these dropped off so did the home loan application numbers.
According to a spokes person from Veda Advantage there’s no sign in Australia of a US-style sub-prime mortgage crisis.
Veda Advantage statistics on bad credit instances including loan defaults, arrears, bankruptcy and the like suggest that the Australian numbers of bad credit loan applications have actually fallen over the last couple of years.
Consumer credit quality has improved. Over the last two years households have adjusted to the tougher economic conditions by being more cautious and people with poor credit history seem to be staying out of the home loan market.