Lending growth defies tough times

According to the Deloitte's Australian Mortgage Report released yesterday, mortgage lending continues to grow at an annual rate of around 10%, despite the hard economic conditions.

While this figure is lower than the 12% - 13% recorded in 2007, the result is encouraging given the current low interest rate environment and government incentives for first home buyers.

The report also found that the mortgage industry is showing the resilience needed to endure volatile times and though the outlook for 2009 is challenging, the fundamentals remain sound.

The report stated that demand would continue to be fuelled by strong population growth, the ongoing shortfall in property supply, government incentives and lower interest rates.

The report commented that the potential of slowing economic growth and unemployment uncertainty remains a concern and should be closely monitored for its impact on lending.