8 April 2009

Source: NZPA

Rising demand in the housing market, on the back of low interest rates and bargain-hunting, pushed mortgage applications to a 16-month high last month, according to credit reporting company Veda Advantage.

March mortgage applications rose 38 percent on a year earlier to the highest monthly total since November 2007.

Interest was led by baby boomers, aged 44 to 62, with a 45 percent rise in mortgage applications, followed by Generation X (28-43 years old).

Against the previous month, applications rose 37 percent in February from January, and 29 percent in March from February.

“Today we are experiencing a level of activity in mortgage applications that we have not seen since house prices began falling in late 2007,” said Veda Advantage managing director John Roberts.

“This activity reflects the lower interest rates stimulating demand, and shows the market going to fixed terms to lock in these rates.”

Applications had only risen marginally for Generation Y purchasers, those younger than 28 years old, probably as a result of tighter rules over minimum deposits.

Applications to any lenders go to Veda Advantage. The company did not release the total number because it was commercially sensitive.

The figures reflected data from the real estate industry which also showed a rebound in the housing market.

The median house price rose between January and March following a downward trend in the second half of last year, to match the pre-recession peak of $399,000 from October 2007.