This article is from the Australian Property Journal archive
DEMAND for housing finance from owner occupiers has edged up marginally by 1.3% in June, partly driven by the double interest rate cuts, according to the Australian Bureau of Statistics.
Owner occupier housing finance commitments are 5.0% higher over the year.
ANZ Bank senior economist David Cannington said the growth was partly driven by the May and June RBA rate cuts, which should provide further support to housing finance growth in the coming months.
However he said weak housing sales activity and soft economic conditions in some parts of the economy will continue weigh on housing finance going forward.
The value of total housing finance commitments also increased, by 2.4% to be 3.9% higher over the year. Both owner-occupier and investor commitments were higher in the month, up 1.2% and 4.9% respectively.
With improved house purchase affordability and tight rental markets putting upward pressure on rents, first home buyer activity continued to increase by 4.6%.
Housing finance increased across all states and territories except Queensland (-1.4%) and Western Australia (-1.2%).
Tasmania showed the largest increase to be 5.4% higher in the month, followed by Northern Territory (4.4%) and South Australia (2.4%).
Whilst housing finance growth continues to be led by the big three mining states in annual trend terms (WA +19.6%, Queensland 14.9% and NT 15.3%), monthly trend growth has been weakening across these states since December 2011.
ANZ Bank’s head of property research Paul Braddick said despite some improvement in building approvals in recent months, particularly for small to medium-density housing, data supports a soft outlook for housing construction.
“The historically volatile value of construction finance increased 15.9% in June (following a 11.7% decrease in May). The increase in June’s construction finance was driven by an 80.4% increase in investor construction finance for the month (following a 49.4% decrease in May), while owner-occupier construction finance increased 3.5%,” he said.
“Looking forward, the May and June RBA rate cuts and possible further rate cuts through 2012 should further soften demand for mortgage holders to lock in to fixed rate mortgages over the coming months,” he concluded.
Property Review
