Home loan demand was affected by interest rate rise.
The three successive
interest rate increases by the Reserve Bank of Australia (RBA) at the end of 2009 has had an affect on home loan demand, according to one expert.
Michael Turner, an economist at financial markets research group 4Cast, said the rise of 75 basis points took the "incentive away for a lot of first home buyers", the Australian Associated Press reported.
His comments come after figures revealed the demand for home loans declined nearly eight per cent in January, the Australian Bureau of Statistics data found.
Owner-occupiers were granted 51,056 loans, which was a 7.9 per cent seasonally-adjusted reduction on December – the fourth consecutive decline and home ownership grant was wound back.
Mr Turner added: "It is not as though it was a massive change in policy - for purchases of established homes it only dropped from $10,500 to $7,000."
Earlier this month the RBA increased the rate by 25 basis points to four per cent, which sparked the Commonwealth Bank – which offers its own range of
credit cards – to announce proposals to up the rates on two of its savings accounts – the NetBank Saver and Business Online Saver.
By Mark Hornby
