Modest improvement in housing finance continues

Australian Bureau of Statistics (ABS) housing finance figures for August 2011 show in trend terms that, following half a year of consecutive decreases, the number of finance commitments increased marginally for the fourth consecutive month; the August increase was 1.6 per cent.

“In trend terms, increases were recorded in all states and territories. The Northern Territory recorded the largest increase, up 2.1 per cent,” said Real Estate Institute of Australia (REIA) Acting President Ms Pamela Bennett. “Increases were evident for the construction of new dwellings (0.5 per cent in trend terms), the purchase of established dwellings (up 1.7 per cent in trend terms) and the purchase of new dwellings (up 2.5 per cent in trend terms),” she continued. “The upturn in lending commitments reflects stability in interest rates and the housing market as well as increased competition among lenders,” she said.

The number of first home buyers, as a percentage of total owner occupied housing commitments increased to 15.3 per cent in August compared to 14.9 per cent in July. This proportion is well below the long-run average of 20.1 per cent and dramatically down from the 28.5 per cent level of April 2009. The value of investment housing commitments increased by 0.6 per cent (in trend terms) in August and follows a 0.5 per cent (in trend terms) increase in July following fourteen consecutive months of falls. “Whilst the continuing low levels of finance commitments to first home buyers remains a concern, the latest figures show that buyers are gradually returning to the market,” concluded Ms Bennett.