Home lending continues to rise through June

By the resi financial blog team, 06 September 2013

Home lending up in June

Buyers considering a home loan are likely to be in good company, as new information has shown a rise in the number of housing finance commitments in June.

According to the Australian Bureau of Statistics (ABS) housing finance commitments have increased by 1.9 per cent for owner occupiers in June compared with May 2013.

This rise follows on from two months of growth over April and May, at 2.3 per cent and 2.2 per cent respectively.

Over the last 18 months, the Reserve Bank of Australia has made many reductions to the cash rate, resulting in it settling down to 2.5 per cent this month.

This has allowed many people to afford property purchases through lower variable and fixed interest rates in Australia, and in turn has stimulated consumer confidence.

These three consecutive rises are a positive shift for the property market, and have been welcomed by the Real Estate Institute of Australia (REIA).

"Increases were recorded in all states with the largest increases in Queensland and South Australia, up 2.3 per cent and 2.1 per cent respectively, in trend terms," said REIA President Peter Bushby.

Furthermore, there is evidence that property investors are beginning to return to the real estate market, as the ABS information showed a rise of 0.7 per cent for investment housing commitments in June.

Lending for new homes has also risen, which may signal that first home buyers are slowly beginning to respond to the changes made to state-provided first home owner grants in the country.

The number of loans obtained for the purchase or construction of new dwellings by owner occupiers in the country increased by 0.6 per cent - a level that is 13.3 per cent higher than one year ago.

"These figures indicate that a steady recovery in the new homes market is continuing, with growth in the number of loans to those purchasing new homes," said Housing Industry Association senior economist Shane Garrett.

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Categories: Home Loans