Rise Belies Weakness in Housing Finance Numbers
Despite a rise in August, housing finance approvals for owner occupied housing have fallen back to levels experienced earlier in the year as concerns related to interest rates, affordability and pre-election jitters continue to frustrate the housing market, according to peak building and construction industry organisation Master Builders Australia.
“There was an encouraging lift in loans for construction of new and recently completed dwellings, but it has done little to lift the underlying trend which is essentially flat as a tack,” said Mr Peter Jones, Master Builders’ Chief Economist.
“Underbuilding in NSW is a real concern, with delayed recovery only compounding the growing imbalance between demand and supply estimated at close to 20,000 dwellings per annum.
“A tight rental market is beginning to attract investors back into the market despite continued washout from end of financial year positioning, but the fallout from the sub-prime meltdown and higher interest rates will be a setback over the coming months.”
- The total number of dwellings financed for owner occupiers, seasonally adjusted rose by 1.6 per cent in August 2007, to be down 0.3 per cent on the same time a year ago.
- The number of loans for the construction of dwellings rose by 2.7 per cent in the month, to be up 0.3 per cent on the same month last year.
- The number of loans for the purchase of new dwellings fell by 0.2 per cent in August, to be up 7.2 per cent higher than the same time last year.
- The number of loans for the purchase of established dwellings rose by 1.6 per cent in August, to be 0.8 per cent lower than the same time last year.
- The value of lending to finance the purchase of investment housing fell by 4.5 per cent in July on top of a revised 11.1 per cent fall the previous month, although the series remains up by 16.8 per cent on a year ago as investor-driven activity begins to pick up after a lengthy four year downturn.