Demand for home loans continued to wane in February, even before the two latest interest rate increases, new data data released on Monday showed.
Just 50,287 mortgages were granted to owner-occupiers in February, down by a seasonally-adjusted 1.8 per cent compared to January, and the fifth straight month of decline, Australian Bureau of Statistics data shows.
Economists’ forecasts had expected a 1.0 per cent fall in February home loan commitments.
Last year’s three interest rate rises and an end to the federal government’s more generous first homebuyer grant at the end of 2009 were blamed for the steady drop-off in mortgage demand.
The Reserve Bank of Australia has since raised the cash rate twice this year, the most recent being at last week’s monthly board meeting that took the cash rate to 4.25 per cent and 125 basis points above its 2009 trough.
First homebuyers made up 18.1 per cent of loans granted in February compared to 20.5 per cent in January, and down from a record high of 28.5 per cent in May 2009.