Mortgage demand picks up

Demand for mortgages Down Under has picked up, a 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, a new report shows more than 47,300 home loans were approved in April, a 4.8 percent increase compared to the previous month.

The housing market has been under a cloud since last November's 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 percent, with solid increases also recorded in Victoria and Western Australia, but the ACT was the stand-out with an 8.8 percent increase in the month.

There were also signs that new home buyers were growing in confidence about the interest rate outlook, shying away from the security of fixed-rate loans, which accounted for just 5.6 percent of approvals in April.

This was down from 6.8 percent in the previous March.

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