Media Release
10 February 2010
HOUSING FINANCE CORRECTION
AS FIRST HOME OWNER BOOST ENDS
Statement by Peter Jones, Chief Economist
Housing finance commitments fell again in December, the final month of the Governments First
Home Owner Boost Scheme, according to peak building and construction organisation Master
Builders Australia.
Mr Peter Jones, Master Builders Chief Economist, said
Finance
for first home buyers has
fallen back down to levels seen before the First Home Owner boost scheme was introduced.
He said, Although the recent correction in demand for housing finance comes
after a strong
growth phase, the housing market will now need
upgraders and investors to fill the
gap left
following reversal of the bring-forward of first home buyer demand associated with the boost.
The investment-driven side of the housing market is still being affected by a lack of project
finance due to the credit crunch, with construction
finance
for rent or resale
by investors still
weak.
How upgraders react to recent Reserve Bank
rate rises
will also be important in terms of
understanding market prospects over the next few months.
Master Builders urges
the Reserve Bank to continue to take a more cautious approach on
interest rates and ensure that recovery in the interest-rate-sensitive residential building sector
becomes firmly entrenched and is able to lead the economy out of the downturn.
The total number of dwellings financed for owner occupiers, seasonally adjusted, fell by
5.5 per cent in December, to be up 0.4 per cent on December last year.
The number of loans for new dwellings
(construction/purchase of
new dwellings,
combined) fell by 4.1 per cent in December to be up 40.6 per cent on the same month last
year:
-
the number of loans for the construction of dwellings
fell by
6.4
per cent in
December, to be up 58.4 per cent on the same month last year;
-
the number of loans for the purchase of new dwellings
rose
by 3.0
per cent in
December, to be up 7.5 per cent up on the same time last year.
The number of loans for the purchase of established dwellings fell by 5.7 in December, to
be down 5.1 per cent on the same time last year.
The value of lending to finance the purchase of investment housing rose by 1.9 per cent
in December, to be up 17.0 per cent on a year ago.
For further information contact:
Peter Jones, Chief Economist, Mobile 0403 440 838