Investor activity dampens need for RBA intervention

The Real Estate Institute of Australia (REIA) has highlighted recent housing finance figures, saying they reflect a very stable market with a slowdown in investor activity.

The REIA said the Australian Bureau of Statistics (ABS) figures for August 2014 show, in trend terms, that the number of owner-occupied finance commitments fell by 0.2 per cent.

“Whilst this is the second consecutive month of falls, it comes off the back of monthly increases over the previous 11 months,” it said.

“If refinancing is excluded, in trend terms for August, the number of owner-occupied finance commitments fell by 0.6 per cent – the seventh consecutive drop this year.”

REIA president Peter Bushby said decreases were recorded in South Australia, Queensland, the Northern Territory and Victoria.

“The Northern Territory had the biggest rise of 1.1 per cent. The largest fall was recorded in Queensland – down 0.2 per cent,” he said.

“In trend terms, the number of new dwellings purchase commitments increased by 1.7 per cent, while new dwelling construction decreased 0.2 per cent and the purchase of established dwellings decreased by 0.3 per cent.

“The value of investment housing commitments again increased but by a more modest 0.9 per cent, although in seasonally adjusted terms there was a fall of 0.1 per cent,” he added.

Mr Bushby said the proportion of first home buyers as part of the total owner-occupied housing finance commitments fell to 11.8 per cent compared to 12.2 per cent in July.

“This is the lowest since the series commenced in July 1991. However, the ABS advises caution in using this data due to reporting difficulties,” he said.

“The August 2014 lending figures indicate a very stable market with a slowdown in investor activity, which should ease the Reserve Bank of Australia’s recent concerns over a surge in investor activity that has prompted discussion over the use of macro-prudential controls.”

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