After diving most of 2008, the number of loans committed
for housing is now on the way up, according to the latest
data from the Australian Bureau of Statistics.
The total value of owner-occupied housing commitments
jumped by 7.1% in December 2008 compared to a 1.6% rise in
November 2008. The largest increase in home loan volumes
has been for the purchase of new dwellings, where on a
seasonally adjusted basis the number of housing loans for
newly constructed dwellings soared 15.2% over the month.
Mortgage Choice managing director Paul Lahiff said: "With
the third consecutive month of data showing improved housing
finance demand across major categories, we're confident the
industry has passed a crossroads and is heading in the right
direction, at least until the First Home Owner Boost has run
The latest data also showed a dramatic increase in the
number of first homebuyers back in the market. First
homebuyers accounted for a quarter (25.4%) of the total home
loan commitments taken in December, compared to just 17%
two years ago.
RP Data national research director Tim Lawless said: "The
trend in the data is clear; the proportion of first homebuyers in
the market hasn't been this high since December 2001. With
interest rates likely to fall further and housing values remaining
flat at best, I believe the Australian market should experience
further improvements to affordability, which is likely to drive a
recovery in the lower priced segments of the market."
Investor housing finance rose by 2.9% in December after
dropping 6.8% in November 2008. Lawless said most investors
are likely to be targeting the same housing stock as first
homebuyers, due to the low-risk profile and the fact that these
properties generally provide higher than average rental yields.
"The increased competition in this segment is likely to start
placing upwards pressure on housing prices under $400,000
during 2009," Lawless said.
"With price pressure potentially on the horizon in the lower
priced segments of the market and the fact that the increase in
the First Home Owner Grant expires at the end of the financial
year, first homebuyers may be feeling some urgency to buy
into the housing market. Market conditions remain in favour of
the buyer; however, as competition heats up buyers will start to
lose some of the advantages the soft market conditions have
provided," he said. YM
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