March mortgage applications surge

John Roberts

Baby boomers are returning to the housing market in droves - but younger first home buyers are still doing it tough.

Mortgage applications last month were up 38 per cent compared to the same month last year, and were the highest monthly total since November 2007.

The information was supplied by credit information firm Veda Advantage.

Baby boomers (44-62 years old) in particular appear to be showing a disproportionate interest in the housing market, with a 45 per cent increase in mortgage applications on March 2008.

Generation X (28-43 years old) experienced a 34 per cent increase, while Generation Y (less than 28 years old) had the smallest growth with a 16 per cent increase on March last year.

"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 (NZ) chief John Roberts.

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

Roberts went on to say the much larger increase in the number of baby boomers applying for mortgages, compared to younger age groups, suggests that they are more cashed up and in a better position to snap up perceived bargains in the housing market.

"The fact that applications from Generation Y have increased only marginally over March 2008, may be a result of the tighter rules by lenders regarding minimum deposits."