A consumer credit survey has revealed Wednesday that home mortgage applications posted in the March quarter declined by 15 percent following the government's decisions to return first home buyers grant to pre-financial crisis level.

According to the Australian Associated Press (AAP), the study by credit card company Veda Advantage showed that overall mortgage application slid by eight percent on the December 2009 quarter and leading into March 31, which represented the first quarterly decrease in mortgage demand since the December 2008 quarter.

The federal government first raised the home owners grant to $21,000 in October 2008 to fund the construction of new homes and allowed grants of $14,000 for those who have existing homes, and as conditions normalised last year, the grant for the enhanced scheme was reversed to $14,000 for new homes and $10,500 for existing homes last year.

Then in another reversal move, the grants were steadied to $7,000 from January this year and this time covering both types of homebuyers.

Veda's head of external relations Chris Cration said that the consumer credit demand index was compiled from 42 million consumers inquired from October 2002 to March 2010, as he stressed that the government's stimulus programs have been effective in pushing up mortgage demands.

He added though that as a result of the withdrawal of government incentives, steep falls in housing credit demands have been seen in 2010, as data provided by Australian Finance Group hinted that first home buyers continued its decline from 28 percent in March 2009 to 10 percent in March 2010.

In spite of the fall in mortgage demands, Veda told AAP that an overall credit growth may still be seen as it cited that credit card and loan applications only dropped by two percent in the March 2010 quarter, which is the smallest slip seen within a two-year period and an actual increase of six percent coming from the December 2009 quarter.