realestatebusiness logo
Subscribe to our newsletter SIGN UP

Rate of lending for housing slowing down: REIA

October 15, 2013 Reporter 0 comments

Staff Reporter

The latest housing finance figures by the Australian Bureau of Statistics (ABS) show that although total lending for housing continues to grow steadily in response to interest rate cuts and improving consumer confidence, the rate of increase is slowing down.

The Real Estate Institute of Australia (REIA) reported that housing finance figures for August 2013 show, in trend terms, that the number of owner-occupied finance commitments rose by 0.6 per cent – following increases of 1.0 per cent in July and 1.5 per cent in June. This was the lowest monthly increase in trend terms since January.

If refinancing was excluded, the increase, in trend terms for August was 0.3 per cent.

REIA president Peter Bushby said “Increases were recorded in all states except Western Australia, with the largest increase in the Northern Territory, up 2.3 per cent in trend terms”.

“There are increases in the purchase of established dwellings (up 0.7 per cent in trend terms), the purchase of new dwellings (up 0.3 per cent in trend terms) and the number of commitments for the construction of new dwellings (up 0.7 per cent in trend terms).”

The value of investment housing commitments rose by 0.8 per cent in trend terms in August, resulting in well over a year of consecutive monthly increases.

In addition, the proportion of first home buyers in the number of owner-occupied housing finance commitments fell to 13.7 per cent, compared to the July figure of 14.7 per cent.

“The figure is the lowest since April 2004 and is far lower than the long-run average proportion of 20.1 per cent, despite eight interest rate cuts since November 2011,” Mr Bushby said.

“In large part, this drop can be attributed to state governments withdrawing previous levels of support for first home owners buying established dwellings, and it is established dwellings that 80 per cent of first home buyers prefer.

“With the proportion of first home buyers remaining consistently below the long-term average, despite the latest figures incorporating all the interest rate cuts, this and a review of inefficient state taxes such as stamp duty, need to be a high priority issue for the new government.”

Rate of lending for housing slowing down: REIA
lawyersweekly logo
Recommended by Spike Native Network
Listen to other installment of the Real Estate Business Podcast
reb top 50 women 2018

The 2018 REB Top 50 Women in Real Estate ranking is out now, see the full 2018 ranking here!

featured podcast

featured podcast
Million-dollar agent tells why there is no substitute for honesty, empathy and honourability

Placing at number 29 in the REB Top 50 Women ranking for 2018, Anna Younan has demonstrated that persistence and a consistent work ethic do...

View all podcasts

What is the most important attribute to have in real estate sales?

Old fashioned grunt
Do you have an industry update?
Ensure you never miss an issue of the Real Estate Business Bulletin. Enter your email to receive the latest real estate advice and tools to help you sell.