Housing Finance Correction As First Home Owner 'boost' Ends 1

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10th February 2010, 03:45pm - Views: 793





Industry Construction Master Builders Australia 1 image

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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 Government’s 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






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