Top 5: Finance & property quotes week commencing September 29

By the resi financial blog team, 07 October 2014

Top 5: Finance & property quotes week commencing September 29

After a tumultuous week in politics and the property market it's likely those considering their first home loan will be watching the market closely This week's round up of quotes shed some light on the various factors at play, and how they are seen to affect the economy.

#1. There has been a lot of talk recently of the property and construction sectors taking up the slack the country is experiencing from the mining industry. In a very timely fashion, the Housing Industry Association (HIA) has just released its data on sales of new homes for August. A 3.3 per cent increase in new home sales for the month was largely bolstered by the strong multi-units market which saw an increase in sales of 19.8 per cent. Diwa Hopkins, HIA economist, said "it is important for the new home building sector and the broader domestic economy that we continue to see evidence of historically high levels of building approvals and new home sales throughout 2014 and into next year, even if the peak for these indicators has passed."

#2. Hand-in-hand with sale of new houses, comes the good news in the housing consents department. August saw a 3 per cent increase in approval for new buildings. Again, the bulk of which were apartments and other types of attached housing, coming in at 7,409 for August, an increase of 9.2 per cent, according to an October 2 release by the HIA. Geordan Murray, HIA economist, noted that "in the twelve months to August approvals reached 197,571 – a record high in any twelve month period. This result demonstrates that accommodative monetary policy settings are facilitating a sustained recovery in new home building."

#3. Capital gains for September showed a modest 0.1 per cent increase across the country for the month. This has come as a breath of fresh air for buyers as the two previous months showed incredible price rises. RP Data national research director Tim Lawless said that "a moderating annual trend, as well as the relatively flat September result, is likely to be welcome news to policy makers and potential buyers after the winter months recorded the largest capital gain since 2007. The softer September result is also likely to be seen as a positive indicator by the Reserve Bank which has recently raised concerns about the level of value growth and speculative investing in the Sydney and Melbourne housing markets."

#4. In a September 30 ABC News article, commenting on the Reserve Bank of Australia's statements in its latest Financial Stability Review in which it highlighted the potential need for macroprudential policies, Deborah Ralston, director of the Australian Centre for Financial Studies said "the more direct your policy is, the less likely you're going to have unintended consequences. If you look at the extreme example of, say, increasing interest rates, the potential for unintended consequences is enormous right across different sectors of the economy."

#5. Back to the need for increased housing supply, Senator Sam Dastyari highlighted the need for new construction and ease of access to finance for first home buyers. "As we're heading towards a population of 38 million by 2050 we have to be building six to seven million new homes to accommodate these extra people and nothing's been done about that by the Government," he said in a September 29 article by ABC News.

Categories: Home Loans, Property Investment