Home Lending Figures Rise Slightly in April

By Peter Sarmas on 13 Jun 2013
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Home Lending








Source: Idaho Housing

The number of approved home loans rose by a seasonally adjusted 0.8 per cent in April, according to the latest housing data from the Australian Bureau of Statistics. The findings were well below market expectations of a two per cent rise for the month, especially after previous March data had shown a 4.8 per cent increase.

Loan Market spokesperson Paul Smith was upbeat about the figures. He said that April was the fifth consecutive month of growth for the lending sector, with 48,475 home loan approvals. “Growth like this is encouraging as it demonstrates that confidence is returning to the property and finance markets. The RBA rate cut in May and the increased competition between lenders during this period should see another record set in May’s ABS data,” said Mr Smith.

Rises in the number of owner occupied dwellings were recorded in South Australia (7.6 per cent), WA (1.8 per cent), QLD (0.8 per cent) and NSW (2.1 per cent). Victoria recorded the nation’s largest fall with a decline of 4.4 per cent on seasonally adjusted terms.

Moreover, the ABS housing data revealed that home loans approved for investors rose by 1.1 per cent to five-year highs in April. CommSec chief economist Craig James said the rise in investment loans could be attributed to “tight rental markets, state government grants for home builders, a relative lack of new homes being built and low interest rates attracting investors.”

First-home buyer commitments also nudged upwards to 14.3 per cent in April, from 14.2 per cent in March. In a release by Westpac, their analyst team said, “First-home buyers remain the stand out weak spot in the approvals data – we estimate loans to this segment were up 0.7 per cent (seasonally adjusted) in April but are still down 10.8 per cent annually and at very low levels by historical standards, particularly in NSW and Queensland.”

Seasonally adjusted loans for construction were also sluggish in April, rising by just 0.2 per cent, while loans for the purchase of new dwellings eased by 0.4 per cent. Shane Garrett, senior economist for the Housing Industry Association, said the figures on construction loans could have been better. “For owner occupiers, the aggregate number of loans for the construction and purchase of new homes was flat during April 2013, itself a disappointing outcome, but the number was 17.9 per cent higher than twelve months earlier.”

About the Author

Peter Sarmas is a Certified Property Investment Advisor (PIAA) and Vendor/Buyer Advocate. Before becoming the founder of Street News, Peter completed a Degree in Applied Science (Chemistry) and a Graduate Diploma in Property Valuations (Hons). Peter believes property investing is a major and potentially risky undertaking. In his view, everyone should have an independent person acting on their behalf when seeking property investment advice.

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