Housing market recovery imminent: CommSec

Housing market recovery imminent: CommSec

Posted on Wednesday, August 08 2012 at 2:32 PM

There are several “encouraging” signs of improvement in housing activity, backed up by positive data, which indicate a housing market recovery is imminent, according to CommSec.

There was a lift in the number of new
owner-occupier housing loans in June of 1.3 per cent. The value of all home
lending increased by 2.3 per cent.

CommSec economist Savanth Sebastian says
substantial rate cuts and consolidation in house prices over the past year have
enticed potential buyers out of the woodwork.

The average home loan across Australia now
stands at $295,000, which is up for the fourth consecutive month since
bottoming out earlier this year.

Investor activity is also on the rise,
thanks to improving job security and low rental vacancy rates across Australia.

“And even the anecdotal evidence across
Commonwealth Bank seems to suggest there’s a healthy pick up in the number of
housing recoveries,” Sebastian says.

General consumer confidence also “looks
like shifting in the right direction”, which is crucial for a turnaround in
property, he says.

In coming months, these sustained positive
factors are likely to translate to a bigger pickup in building activity, he
says. Construction loans in June saw their biggest rise in almost three years.

“The fundamentals for the housing sector
certainly remain sound. It is clear that the attractiveness of property as a
long-term investment continues to garner interest.”

He believes there are also strong signs
that home prices have bottomed.

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