Australian Property News
Home lending drops
Posted on Wednesday, March 10 2010 at 4:14 PM
The number of loans taken out by owner-occupiers in January this year fell by 7.9 per cent, seasonally adjusted, compared to the previous month according to the latest Australian Bureau of Statistics (ABS) figures.
Meanwhile the value of dwelling commitments fell by 3.3 per cent overall to $21.159 million.
The value of loans for owner-occupied housing fell by five per cent, while for investment housing it increased by 0.9 per cent.
In original terms the number of commitments for first homebuyers, as a percentage of total owner-occupied housing finance commitments, fell from 21 per cent in December 2009 to 20.5 per cent in January 2010.
The release of the figures showing a drop in housing finance comes as the Reserve Bank of Australia lifted official interest rates to four per cent last week.
According to the Housing Industry Association (HIA), the ABS figures showing that home lending for both new and existing dwellings fell for a third straight month in January have rubbished claims of a property bubble and poured cold water on the strength of Australia’s housing recovery.
HIA senior economist Ben Phillips says the removal of the Federal Government's First Home Owner Boost and increasing interest rates have clearly lowered activity in both the new and existing homes market.
"The Reserve Bank must take stock of the impact that higher interest rates are having on the new homes market," he says.
"Aggressive interest rate increases will ultimately constrain new housing and push up prices for both home purchasers and renters."
"Population growth across the nation is at record levels, and construction of new housing is lagging badly."
"The end result is worsening housing affordability and a growing gap between the housing haves and have nots."
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