By: Staff Reporter
Inflated house prices and rising interest rates have contributed to the seventh consecutive drop in home loans.
According to the Australian Bureau of Statistics, housing finance for owner-occupiers fell by a seasonally adjusted 1.8 per cent in April.
Just 47,669 loans were written – the smallest number in any month since March 2001.
The Housing Industry Association’s senior economist Ben Phillips said that without the government support and low interest rates observed in 2009, the new housing market was looking decidedly unhealthy.
“A sustainable recovery in residential construction is looking increasingly unlikely amidst a debilitating confluence of higher interest rates, tight credit availability, and obstacles related to land supply, planning, and infrastructure charges and taxation,” Mr Phillips said.
Over the three months to April, first home buyer loans fell 51.4 per cent, while trade up buyers fell 8.6 per cent.
“The large pull forward in first time buyers in 2009 has predictably been replaced by a sharp contraction in numbers. However, upgrade buyers are simply not entering the market in sufficient numbers to provide the necessary net boost to generate a sustained housing recovery,” Mr Phillips said.
“The only bright spot in this release is that investment loans for new housing increased 9.1 per cent over the month, assisting total investment to increase by 1.3 per cent.”
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