We want a new car, but what about a new home?

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I caught up recently with a friend who works for a mid-sized lender and he explained how car loan approvals were through the roof, signaling a renewed willingness by consumers to splash cash on a pricey set of wheels.

While there were some modest improvements to most consumer sentiment studies in the second half of 2012, the results were still pretty lacklustre. It was abundantly clear that Australians remain timid about spending cash. We’re simply afraid of debt.

Instead, we’re apparently shacked up at home with a jar of pennies, counting them furiously in between stuffing wads of cash under the bed. Well, except when it comes to cars, for which we’ve got a totally different attitude. Last year, a record 1.1 million new cars were purchased across the country.

Yes, more than one million cars for a population of 22.8 million. That’s incredible. In fact, we’re now buying more new cars per capita than the UK, US and Japan.

Does that renewed spending spirit for automobiles translate to home purchases? After all, a new car is one of the worst investments around. Surely we’d be more willing to buy bricks and mortar if we’re content to drive off a lot in a rapidly depreciating piece of steel? I asked mortgage brokerage chain Loan Market for its data.

From an approvals perspective, the month of October makes for interesting viewing. There were healthy across the board month-on-month approval increases in Sydney and Brisbane (eight per cent each), Perth (10 per cent) and even Melbourne (five per cent). Even Loan Market’s brokers in Adelaide saw a 10 per cent increase in mortgage approvals in October.

In November, despite most of us switching off for the festive season or taking off on holiday, there were month-on-month approval increases in Brisbane (four per cent), Perth (five per cent), Adelaide (14 per cent) and Melbourne (12 per cent). Sydney saw a one per cent fall in growth.

The month of December was quiet as you’d expect it to be. The month-on-month growth data shows some interesting trends in terms of borrower types. Just as each city is performing to the beat of its own drum in terms of home values, there are vast differences in finance dominance from market to market.

In Sydney in October, there was a 26 per cent increase in loan approvals for investors while November saw a modest but positive five per cent lift for construction.

Loan Market broker Lee Banh says mortgage approvals in Sydney in the second half of last year gained short bursts of momentum. Refinances are also on the rise, thanks to lower interest rates and greater competition among lenders, he says.

In Brisbane, first homebuyer approvals saw a 21 per cent lift in October and a massive 50 per cent lift in November. Loan Market broker Christian Paterson describes the past six months as a “bit of a rollercoaster”. Recently though there has been a heightened level of enquiry, he says.

Despite continued grumbling about fears of an oversupply in Melbourne, investors drove a 13 per cent month-on-month increase in October. Loan Market broker Marios Rokka says there’s still strong demand for house-and-land packages and developers are catering specific products to these consumers. “It has certainly helped supplement decreased enquiry levels from other sources,” he says.

There are more official rate cuts tipped and even a frankly shocking suggestion that the big four banks are getting ready to lower their mortgage interest rates independently of the Reserve Bank. With this in mind, as well as greater levels of confidence in homebuyer sentiment, there’s no doubt more optimistic finance figures could be on the cards. Watch this space.

If you’re keen for a comprehensive outlook for the year ahead in property, check out our February cover story. We’ve crunched the data, picked the brains of countless experts and even presented three-year price forecasts.

Shannon Molloy is the deputy editor of Australian Property Investor www.apimagazine.com.au