Home loan sizes plummet
Home loan sizes declined 7.7 per cent in the three months to February 2016 or by $29,100, reflecting increasing pressure on the Australian home loan market, said Finder.com.au
The Australian comparison website said it's the biggest three-month drop since May-June 2000, with the average home loan now being $357,200.
The website also said it's the first time on record, the average home loan size dropped by more than one per cent in three consecutive months, with South Australia was the only state to have an increase in loan sizes, with an increase of 0.62 per cent in February.
The site said New South Wales reported the biggest decline on record, "where the average home loan size dropped by 5.75 per cent in February. It dropped by 10.15 per cent or $45,500, in the last quarter."
Money expert at Finder.com.au, Bessie Hassan said, "tougher bank lending policy introduced during mid-2015", are finally taking affect.
Hassan said, "banks are securitising new loan application more closely, taking a tougher line when assessing borrowers income."
On the three month scale, home loan sizes dropped in every state, with Victoria and Queensland down by six per cent, while South Australian, Western Australia and Tasmania were down between two to three per cent, said finder.com.au
Finder.com.au said this is reason the housing market has been decelerating, as year-on-year median capital city prices only clawed up by 0.2 per cent.
Hassan said there is positive in this situation as, "the home loan market will be under pressure, and banks will be eager to secure new customers…this could lead to an increase in housing affordability with interest rates declining even further."
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