According to the Australian Bureau of Statistics (ABS), the number of new home loans for has plummeted to its lowest level since early 2009.
Home loans for the purchase of new dwellings fell by 3.2% in March 2010 and 14% over the quarter, while loans for construction decreased by 7.3% in March 2010, representing a quarterly drop of 15%. The figures for March 2010 mark the sixth consecutive decline in total lending and the fifth straight fall in loans for construction.
Harley Dale, chief economist of the Housing Industry Association, blamed a “debilitating confluence” of higher interest rates, tight credit availability and obstacles related to land supply, planning, infrastructure charges and taxation for the malaise.
Mr Dale further stated that “these forces are standing in the way of a sustainable lift in new construction in 2011 and beyond that would allow inroads to be made into Australia’s large and growing housing shortage. A circuit breaker is urgently required to expedite progress in reducing supply side barriers and easing credit conditions. Otherwise the financial strain on renters and entry level buyers will only worsen and upward pressure on interest rates will intensify. “
ANZ economist David Cannington said the fall in housing finance approvals both in terms of value and number confirmed that slowing momentum in property finance commitments will continue to present concerns for the undersupply issue facing the Australian housing market.
"Housing supply will continue to slow into 2010. This will leave the Australian housing market well short of the supply necessary to keep up with what is still very strong underlying demand. [The ABS data] confirms our view that the shortage of housing in the Australian market will provide the fundamental economic forces to keep house prices growing in 2010, although not at the growth levels seen in 2009” said Mr Cannington.
Home loans for the purchase of new dwellings fell by 3.2% in March 2010 and 14% over the quarter, while loans for construction decreased by 7.3% in March 2010, representing a quarterly drop of 15%. The figures for March 2010 mark the sixth consecutive decline in total lending and the fifth straight fall in loans for construction.
Harley Dale, chief economist of the Housing Industry Association, blamed a “debilitating confluence” of higher interest rates, tight credit availability and obstacles related to land supply, planning, infrastructure charges and taxation for the malaise.
Mr Dale further stated that “these forces are standing in the way of a sustainable lift in new construction in 2011 and beyond that would allow inroads to be made into Australia’s large and growing housing shortage. A circuit breaker is urgently required to expedite progress in reducing supply side barriers and easing credit conditions. Otherwise the financial strain on renters and entry level buyers will only worsen and upward pressure on interest rates will intensify. “
ANZ economist David Cannington said the fall in housing finance approvals both in terms of value and number confirmed that slowing momentum in property finance commitments will continue to present concerns for the undersupply issue facing the Australian housing market.
"Housing supply will continue to slow into 2010. This will leave the Australian housing market well short of the supply necessary to keep up with what is still very strong underlying demand. [The ABS data] confirms our view that the shortage of housing in the Australian market will provide the fundamental economic forces to keep house prices growing in 2010, although not at the growth levels seen in 2009” said Mr Cannington.
Posts
