Another Fall In Housing Finance Puts Recovery In Jeopardy

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9th June 2010, 02:51pm - Views: 645





Industry Construction Master Builders Australia 1 image

Industry Construction Master Builders Australia 2 image

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






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