Signs of mortgage demand perking up

DEMAND for mortgages has perked up in a further tentative sign that consumers may be starting to loosen their purse-strings in a stable interest-rate environment.

Following a surprise jump in retail spending data last week, a new report released today showed more than 47,300 home loans were approved in April, a 4.8 per cent increase compared to the previous month.

This was the biggest monthly rise in over two years and the first growth in housing finance this year.

"On the surface, today's data has some hints that housing demand in the owner-occupier market may be stabilising, maybe even rising a touch," National Australia Bank senior economist David de Garis said.

The housing market has been under a cloud since last November's chunky rise in lending rates, with home building approvals also sinking and house prices easing.

This summer's spate of natural disasters has also taken its toll on consumers, with the latest national accounts showing households continue to prefer to save rather than spend.

Still, the latest housing finance data from the Australian Bureau of Statistics showed Queensland leading the way in the month of April as the rebuild got under way after the floods.

Mortgage approvals there jumped 6.2 per cent, with solid increases also recorded in Victoria and Western Australia, but the ACT was the stand-out with an 8.8 per cent increase in the month.

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