KEY POINTS:
A small rise in mortgage application figures released by credit information provider Veda Advantage is being viewed as a "hint" of some stability in the housing market.
Veda said today that consumer mortgage inquiries in May were 5 per cent up on April's figures, and a 7 per cent increase on March.
The company's New Zealand director John Roberts said the slight increase in mortgage applications on the back of a drop in house prices, suggested speculative buyers were taking advantage of market conditions.
The slight reversal in the downward trend was thought to be due to large trading banks reducing two-year fixed term interest rates, even though the Reserve Bank had yet to move the Official Cash Rate.
Last week the Reserve Bank said it expected house prices to fall from their peak last year by 13 per cent. If inflation was taken into account, the projected fall in house prices would be 22 per cent.
Today Mr Roberts said that considering the way the market had trended since 2000, a significant recovery in the next 12-18 months would be an anomaly, particularly in light of wider economic factors.
"But there are at least some indications that activity in the property market is not stagnating, despite the likelihood of a further slump in house prices," he said.
"The increase in mortgage applications hints at some stabilisation in the housing market, though it is obviously far too early to talk about a revitalisation."
- NZPA
