Australian Property News

Housing finance up a little

Posted on Thursday, September 09 2010 at 8:49 AM

Building and construction organisation Master Builders Australia has welcomed an upturn in some housing finance commitments during July.

Master Builders’ chief economist Peter Jones said the market might be poised to bounce back from recent setbacks caused by the ending of the Federal Government’s First Home Owner Boost and interest rate rises.

Australian Bureau of Statistics (ABS) figures for July showed the number of loans for housing owner-occupiers rose by 1.7 per cent, seasonally adjusted, but was down by 25 per cent on last year

“Despite today’s pick up, a second leg to the housing recovery is by no means guaranteed as the faltering housing upswing still needs to overcome a hangover from government stimulus programs, the lingering effects of the credit squeeze and interest rate adjustments,” Jones said.

“Critical for the housing market will be a further period of interest rate stability to engender confidence and encourage upgraders, investors and first homebuyers alike.”

Jones said Australia needed a “major phase of residential building to go anywhere near to meeting the housing needs of the population”.

“Although finance commitments for the building or purchase of new dwellings remain well up on the low point in late 2008, loans need to kick up again after the recent correction,” he said.

“Despite some improvement in recent times, the investment-driven side of the new housing market is still struggling to overcome the credit crunch and is constraining the upswing.”

Jones said Master Builders Australia believed housing and housing affordability issues needed to be seriously addressed in the new Parliament.

Other figures:

• Number of loans for ‘new’ dwellings (construction/purchase of new dwellings combined) was unchanged in July, but down 20.2 per cent on the same month last year.

• Number of loans for the construction of dwellings fell by 0.7 per cent in July, to be down 23.7 per cent on the same month last year.

• Number of loans for the purchase of new dwellings rose by 1.5 per cent in July, to be down 11.5 per cent on the same time last year.

• Number of loans for the purchase of established dwellings rose by two per cent in July, to be down 25.8 per cent on the same time last year.

• The value of lending to finance the purchase of investment housing fell by 2.3 per cent in July, but was up 10.7 per cent on a year ago.

• The value of lending to finance construction of dwellings for rent or resale fell by 9.2 per cent, but was up 54.1 per cent on a year ago.