Despite a relatively slow start to the year, the lending sector has received some welcome news with the Australian Bureau of Statistics (ABS) reporting that the total number of dwelling finance commitments rose 4.5 per cent in March, seasonally adjusted, to $22.983 billion.
Economists' predictions for March had centred on a four per cent increase in the total number of housing finance commitments.
The fresh data showed that the number of home loans granted in March lifted a seasonally adjusted 5.2 per cent to 48,071, compared with an upwardly revised 46,225 in February. The total value of home loans lifted a seasonally adjusted 5.8 per cent.
Loans to investors also increased over the month with the value of investment housing commitments (fixed loans) rising by 2.1 per cent in seasonally adjusted terms.
Importantly, the number of loans for new homes jumped 21.1 per cent (seasonally adjusted) during March while the number of loans for new dwelling constructions rose 4.6 per cent (seasonally adjusted). These figures suggest that the Reserve Bank's two rate cuts in late 2012 have had a positive, albeit slightly delayed, impact in terms of stimulating mortgages and the home building market.
It will be interesting to see how the Reserve Bank's latest rate cut impacts on dwelling finance commitments moving forward. With the official cash rate now at a 53-year low of 2.75 per cent, and many banks having already passed on the rate cut in full, the domestic lending environment at present is certainly displaying some attractive finance options for prospective property buyers.