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Mortgage demand holds up despite rate rises
The West Australian Mortgage demand holds up despite rate rises

Demand for mortgages remained at a modest pace, even before last week's official interest rate rise, and an even bigger increase in lending rates by the Commonwealth Bank of Australia.

The Australian Bureau of Statistics said 48,333 home loans were granted in September, a 1.3 per cent seasonally adjusted increase over the previous month.

Economists' forecasts had centred on a 1.2 per cent rise in owner-occupied home loans for September.

First time home buyers continued to take-up only a small share of home loans, making up just 15.9 per cent of those granted in September, and only just above the 15.5 per cent, six-year low reported in August.

This compares with a record peak of 28.5 per cent at the height of the federal government's offering of a more generous first home owners grant, a scheme that has since since.

The Reserve Bank unexpectedly raised the official cash rate by 25 basis points at last week's board meeting, which triggered a 45 basis point increase by the Commonwealth Bank in its standard variable mortgage rate.

Other major banks - ANZ, National Australia Bank and Westpac - have yet to announce their lending rate decisions, despite being over a week since the central bank board meeting.