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Financing values up, finance commitments down

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ABS figures show rise in financing values but fall in volume
The latest housing finance figures from the Australian Bureau of Statistics (ABS) makes for some interesting reading with the total value of financing for dwellings rising slightly in September (up 0.7 per cent from August) while the number of finance commitments fell (0.2 per cent). New homes fared better than established ones (rising in volume by 1.2 per cent against 0.2 per cent) and financing for investment was stronger than owner-occupier (1.7 per cent against 0.1 per cent). There was a slight improvement in the number of first-time buyers seeking home loans; up to 12 per cent in September compared to 11.8 per cent in the month before.

The Real Estate Institute of Australia says the figures for September 2014 show, in trend terms, that the number of owner-occupied finance commitments fell by 0.2 per cent. REIA’s Peter Bushby says, “Decreases were recorded in South Australia, Queensland, Western Australia and Victoria. The Northern Territory had the biggest rise of 3.2 per cent. The largest fall was recorded in South Australia – down 0.4 per cent.” REIA is warning that any macro-prudential tools that the RBA may consider should not be implemented as they may cause “unintended consequences.”

Meanwhile, the Housing Industry Association suggests some government intervention is necessary for the market. Chief Economist Harley dale says, “The aggregate number of loans for first home buyers is still very low from a historical perspective. Policy reform is vital to turning this situation around and needs to be aimed at the excessive and inefficient taxes and regulation levied on housing.”
November auctions set to reach record levels in Sydney
November is on target to beat the all-time record for home auctions with more than 5000 expected by the end of the month. This past weekend there were 943 properties going under the hammer although clearance rates dipped below a four-weekend average of 80 per cent for the first time this spring. With high levels of choice and Christmas fast approaching the rest of this month should see fast and furious activity at the auctions.
Foreign investment booms as figures highlight lack of activity on illegally acquired homes
Foreign investors who illegally acquire Australian property have little to fear from the body set up to tackle the issue. Figures show that the Foreign Investment Review Board has only issued 17 orders requiring the sale of illegally obtained properties since 2003. A parliamentary committee has heard that rules stating that foreign investors must sell property within three months of leaving Australia are not being adhered to. The total value of property bought since 2003 by foreign investors is $23 billion. The committee is due to report its recommendations shortly.

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