Despite a recent drop in Australia’s housing finance figures, borrowing activity is expected to pick up this year spurred on by a faster than expected return to normal economic growth.
According to Australian Bureau of Statistics, the total value of owner occupied housing commitments (excluding alterations and additions) dropped by 5 per cent in January.
Personal finance fell 1.5 per cent while commercial finance dropped 1.6 per cent compared to the previous month.
On the other side of the spectrum, the value of commitments for the purchase of dwellings by individuals for rent or resale managed to grow by 2.4 per cent, indicating a return to confidence in the investor market.
The Commonwealth Bank of Australia senior economist John Peters said lending to owner-occupiers and investors is expected to increase as the spectre of unemployment recedes.
“After being scared witless last year, people are feeling more comfortable as each month goes by,” Mr Peters said.
“To some extent that will offset rising rates.”
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