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REIA: Housing finance on slippery slope

10 December 2018 Tim Neary

The October 2018 housing finance figures released today by the Australian Bureau of Statistics show that the number of loans for housing continues to decline, according to the Real Estate Institute of Australia.

REIA president Malcolm Gunning said that there are a number of trends emerging.

“Overall, the figures for October 2018 show, in trend terms, that the number of owner-occupied finance commitments decreased by 0.1 [of a percentage point] — the 13th consecutive month of decreases.


“If refinancing is excluded, the number of owner-occupied finance commitments decreased by 0.3 [of a percentage point] — also the 13th consecutive month of decreases and the lowest since November 2014.

“In trend terms, decreases were recorded in Victoria, New South Wales, Queensland and the Northern Territory. The largest decrease of 2.6 per cent was in the Northern Territory. Western Australia, South Australia, Tasmania and the Australian Capital Territory had modest increases, with the largest of 2.3 per cent in the Australian Capital Territory.”

Mr Gunning said that the value of investment housing commitments decreased by 1.9 per cent in October.

“The dollar amount approved for the purchase of dwellings by individuals for rent or resale is at the lowest level since June 2013,” the REIA president said.

“In trend terms, the number of established dwellings purchase commitments remained unchanged while the purchase of new dwellings decreased by 1.5 per cent and new dwelling construction fell by 0.5 [of a percentage point].

“The proportion of first home buyers, as part of the total owner-occupied housing finance commitments, increased in October to 18.1 per cent from 18.0 per cent in September, and the number of loans to first home buyers increased by 15.7 per cent.”

Mr Gunning said that there were a number of moving parts that make up this situation.

“The continued decline in housing finance reflects the slowing market, APRA restrictions on investors which went too far for too long, the fallout from the royal commission into banking, and concerns about changes to property taxation and its impact should there be a change in government.”

REIA: Housing finance on slippery slope
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