Lending for new homes eases in January
New figures from the Australian Bureau of Statistics show that lending to owner-occupiers for new homes declined in January. The Real Estate Institute of Australia (REIA) says the figures show, in trend terms, that the number of owner-occupied finance commitments fell by 0.1 per cent. This fall follows three consecutive months of no change. If refinancing is excluded, in trend terms for January, the number of owner-occupied finance commitments fell by 0.4 per cent. Finance commitments for investors increased by 1.0 per cent.

REIA President, Neville Sanders commented: “The figures indicate a moderating market with January being the twelfth consecutive month of modest drops in lending levels if refinancing is excluded.” The figures showed a slight decrease in lending to first-home buyers and Mr Sanders concluded that “the current debate on allowing first home buyers access to their superannuation is timely”.

Geordan Murray from the Housing Industry Association highlighted that the latest lending figures follow the Australian Prudential Regulation Authority’s announcement of plans to tighten the monitoring of lending. He says it’s too early to say of January’s figures reflect that but warned: “It is important that the new home building sector is not pushed back into a ‘credit squeeze’ whereby a lack of readily available finance becomes an industry wide problem.”
Source: REIA, HIA

No housing bubble say lenders

The banking industry says there is no housing bubble and the market is more affordable than it has been for five years. The Australian Bankers Association, which represents 23 banks, says that even when the record low interest rates begin to rise households will be able to service their debt. The association’s Key Truths on Australian Housing concludes that those with the largest amounts of debt also have the largest assets. ABA chief executive Steven Muchenberg commented that the value of household assets was higher than household debt by a ratio of six to one and that those with home loans were on average 21 months ahead of their payment schedules.
Source: Sky News
Melbourne’s CBD to see high level of new apartments
The central business district will see 40 per cent of the new apartments planned for Melbourne’s inner suburbs. A report by BIS Shrapnel concludes that new supply for the city will be snapped up by foreign investors; there has been concern about the demand for the planned new homes. The report says that 58 per cent of new apartments in the city are bought by investors for the rental market and that foreign buyers are still attracted by low interest rates and the economy. The CBD is good for apartment developments due to fewer restrictions on, for example, building heights. BIS Shrapnel’s research also shows that the proposed fees of $5,000 being levied on foreign buyers will not significantly impact the market.
Source: The Domain Group