More Australians are getting new home loans this year, but the numbers remain flat for the last decade.
A growing number of Australians have signed for new home loans this year amid record low interest rates.
The number of mortgages by owner occupiers has risen month on month from January to April this year with about 48,000 new mortgages, amounting to $14.7 billion, signed in April.
Despite these figures, loan market activity hasn’t improved to pre-GFC levels, said Michelle Hutchison, spokesperson at RateCity.
"From 2001 to 2009, there were 55,000 home loans written each month on average. For the four years following, there have been less than 50,000 home loans written in any given month...This shows that consumer confidence hasn’t returned to the level it once was and it will take more than a single rate change to entice borrowers back to the home loan market."
Lenders have continued to reduce their home loan rates following May’s Reserve Bank rate cut with 35 lenders, including the big four banks ANZ, Commonwealth Bank, NAB and Westpac, reducing their rates.
HSBC made a cut of 0.90 percentage points to its two-year fixed rate loan this month which now has a 4.59% rate.
With recent low rates, lenders may have to advertise more benefits to attract borrowers, said Hutchison.
“While interest rates are at the lowest levels we’ve ever seen, lenders may need to start offering better incentives for borrowers to attract them to the home loan market, such as reducing upfront fees or promotions to refinance,” she said.
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More borrowers are also fixing their home loans with 21% of all loans fixed in April compared to 18% in March. This is the highest proportion of borrowers fixing their mortgages in the last five years.
Compare: Low rate fixed home loans
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