CHARTS: Fewer Australians Want A Mortgage Despite The RBA's Rate Cuts

Banks expect to field fewer home loan applications in the next 6 months because Australians are pessimistic about the economy.

A UBS survey of Australian bank loan officers this month revealed a “significantly more bearish outlook” than in previous surveys.

Survey respondents – primarily bank CFOs and CROs – said demand for home loans would either remain unchanged or “decrease somewhat”, reflecting the most pessimistic survey finding since the survey series began in early 2010.

The results resound with data from the ABS today, which revealed that far fewer home building permits were issued in June than expected.

Banks told UBS that that demand for household loans had fallen in the past six months and were unlikely to recover in the six months ahead.

That’s despite RBA efforts to boost spending. Australia’s cash rate has been at a record low 2.75% since May, and analysts are expecting further cuts by early 2014.

Here are some charts by UBS analysts Jonathan Mott, Chris Williams and Adam Lee:

“None of the banks indicated an expectation that demand for home loans will increase over the next six months,” the UBS analysts wrote.

“While interest rates have clearly had a positive impact on home loan demand, this appears to be more than offset by concerns around housing market prospects (despite recent evidence of house price inflation), unemployment expectations and weak consumer confidence.

“The RBA can only do so much.”

Now read: ‘My Heart Goes Out To You’: Goldman Boss On Australia’s Growing Economy

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