Holiday season dents home loan activity

According to the CoreLogic Property Market Indicator Summary for the week ending 10 January, mortgage market activity has fallen nationally by 40.2 per cent month-on-month.

Home loan activity has fallen in every state, with NSW leading the decline at 48.3 per cent, followed by Queensland (42.0 per cent), South Australia (37.8 per cent), Victoria (33.7 per cent) and Western Australia (31.8 per cent).

The decline in Tasmania was softer compared with the other states, with home loan activity falling by 4.8 per cent month-on-month.

CoreLogic research director Tim Lawless said that housing markets are still emerging from the holiday period slowdown, with sales activity remaining seasonally subdued.

“There were only 24 capital city auctions held over the past week, but we are expecting auction volumes to surpass 170 next week as the market starts to warm up,” Mr Lawless said.

“By late January, we should have a better feel for how the market is emerging from the festive season. Although the flow of data is still subdued, we are expecting the market to recommence where it left off in late 2020, where momentum was building in both activity and capital gains.”

Across the combined five state capitals, home values have risen by 1.5 per cent over the last 12 months, with Adelaide recording a 5.9 per cent increase.

Brisbane’s home values have jumped by 3.7 per cent over this period, while Sydney and Brisbane recorded a 2.3 per cent increase. However, Melbourne’s home value declined by 1.7 per cent over the last 12 months.

Meanwhile, nationally, across the state and territory capital cities, new properties listed for sale have increased by 10.9 per cent over the last 12 months, while the number of total listings has declined by 17.8 per cent over the last 12 months.

In Melbourne, the number of new listings has increased by 55.0 per cent over the last 12 months, pointing to a recovery in listing numbers since the city faced lockdowns in 2020 to curtail the spread of the coronavirus.

Mortgage activity picked up nationally at the end of 2020, with data for the week ended 29 November showing that activity jumped nationally by 15 per cent month-on-month.

At the peak of the COVID-19 crisis in May 2020, home loan activity dropped by 16.5 per cent and coincided with a large reduction in property market transaction activity during this period.

[Related: Property poised for a strong start to 2021: CoreLogic]

Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.

Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.