Housing finance through the roof

Housing finance through the roof

Posted on Tuesday, January 14 2014 at 8:48 AM

Home loan approvals in November reached their highest level in more than four years, according to new data released yesterday by the Australian Bureau of Statistics (ABS).

New South Wales,
Queensland and Western Australia were the strongest-performing states, helping
the housing finance market return to pre-GFC levels.

Loan Market
director of sales Mark De Martino says the low and stable interest rate
environment that characterised 2013 has been a critical factor in drawing out
more homebuyers.

“New South Wales
has recovered nicely over the past two years, with consecutive month-on-month
growth since January 2012,” De Martino says.

“The resource-rich
states of Queensland and Western Australia approved 15 per cent and 12 per cent
(respectively) more loans (in November) than the same time (the previous)

While official
statistics show first homebuyer activity remains very low in most states and
territories, De Martino has a theory as to why.

Since the removal
of grants for established properties in almost every state, the statistics have
become skewed, he believes. Reported first-time buyer finance commitments are
only for those using a concession or grant.

Given that the
remaining government incentives for first-timers are geared towards newly-built
or off-the-plan dwellings, the data isn’t collecting any
other first homebuyers.

“Enquiries for first homebuyers remain strong at Loan Market, accounting
for 39 per cent of enquiries in November and December. These active buyers are
shopping around and waiting for the right property and time to purchase. The
first homebuyers of 2014 are going to be very prepared and well researched.”

There are growing signs that the Reserve Bank of Australia could raise the
official cash rate at some stage in 2014, he says.

“Fixed rates for both two and three-year terms have been adjusted upwards,
albeit by small increments, by several lenders in the past few weeks.”

Major banks tend to shift their fixed rates back up when they sense
official rates could be about to move, he says.

Housing finance statistics, November 2013













Australian Bureau of Statistics

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