Home loan approvals have soared to a seven year high, suggesting there is plenty of life left in a cooling property market.
The number of approvals rose 2.6 per cent in December to 58,552, while their value increased by 0.8 per cent to $33.5 billion.
“December was an incredibly strong month,” Mortgage Choice chief executive John Flavell said.
“The fact that we haven’t seen this level of demand for home loans since 2008 is a testament to the ongoing strength of the property market.”
St George senior economist Janu Chan said the figures show the property market remains a key supporter of economic growth, despite recent reports of slower price growth, particularly in the strongest markets of Sydney and Melbourne.
“All loans were still marginally higher which shows there is still solid demand for housing,” she said.
“Today’s data suggest that the recent loss of momentum in the housing market, as reflected by lower auction clearance rates and pullback in house prices, is unlikely to signal the beginning of a sustained downturn.”
Low interest rates and an improving labour market will continue to support housing demand, she said.
The data from the Australian Bureau of Statistics also showed the value of loan approvals to investors rose at a slower pace than approvals for owner-occupiers in December, and investor housing loans contracted by more than 13 per cent in 2015.
JP Morgan economist Tom Kennedy said a crackdown by regulators on investor activity was taking effect.
“The investor participation is moving lower while owner occupiers increase,” he said.
“This is what the Reserve Bank and APRA have been trying to engineer.”