Although seemingly microscopic, the April figures of course do not take into account the 25 basis point rise in early May. Once this is incorporated, housing industry groups point out that further falls in numbers of consumers taking out mortgages will show up in coming ABS figures.
"Sentiment towards housing has been negatively affected by the rate rise of last month, and a resumption of the housing finance recovery in the short term is very unlikely," said Harley Dale, chief economist of the Housing Industry Association.
Alongside refinancers, investors cautiously withdrew from the lending market in April - the total value of investment housing commitments dropped by 2%. Prospects for an impending recovery in investor confidence will likely be put on hold once the rate rise is factored in.
On a more positive note, the proportion of first homebuyers taking out home loans edged up to 19.1% during April, from 18.4% in March, but Dale hesitates in declaring a sustained improvement. "Higher mortgage rates and higher fuel costs may well snuff out any further recovery in first home
buyers in the second half of 2006," he said.
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