Media Release
9 June 2010
ANOTHER FALL IN HOUSING FINANCE
PUTS RECOVERY IN JEOPARDY
Statement by Peter Jones, Chief Economist
Housing finance commitments fell for the seventh consecutive month in April due to the ending of
the Government’s First Home Owner ‘Boost’ and higher interest rates, according to peak building
and construction organisation Master Builders Australia.
Mr Peter Jones, Master Builders’ Chief Economist, said
“The combination of rising interest rates
and the hangover from the First Home Owner ‘boost’ scheme threatens the housing recovery.”
He said, “Critical for the housing market will be
a period of stable interest rates to engender
confidence and encourage upgraders and investors to fill the
gap left by the reversal in demand
from first home buyers.”
“Loans for the building or purchase of new dwellings have
also come back
in recent times but
remain well up on the low point in late 2008, which means there is a solid pipeline of new building
work yet to be done.”
“The investment-driven side of the new housing market is still struggling
to overcome
the credit
crunch, although finance for construction of dwellings for rent or resale by investors is beginning to
show some improvement.”
“Given the tenuous nature of
the housing upswing,
Master Builders urges
the Reserve Bank to
keep
interest rates on hold for an extended period to
ensure that recovery in the interest
rate-
sensitive residential building sector can regain momentum.”
Total number of dwellings financed for owner occupiers, seasonally adjusted, fell by 1.8
per cent in April, to be down 25.3 per cent on April last year.
Number of loans for ‘new’ dwellings (construction/purchase of new dwellings combined)
fell by 1.8 per cent in April to be down by 8.2 per cent on the same month last year:
-
the number of loans for the construction of dwellings fell by 4.8 per cent in April, to be
down 8.0 per cent on the same month last year;
-
the number of loans for the purchase of new dwellings rose by 6.3 per cent in April, to be
down 14.1 per cent on the same time last year.
The number of loans for the purchase of established dwellings fell by 1.8 in April, to be down
27.7 per cent on the same time last year.
The value of lending to finance the purchase of investment housing rose by 1.3 per cent in
April, to be up 26.0 per cent on a year ago
-
the value of lending to finance construction of dwellings for rent or resale rose
by 9.4 per cent, to be up 29.1 per cent on a year ago.
For further information contact:
Peter Jones, Chief Economist, Mobile 0403 440 838
NEWS 
