Hi Property Lovers
I came across this article on news.com.au that I thought was a good read.
DEMAND for home loans continued to wane in February, even before the two latest interest rate increases, data released today shows.
Just 50,287 mortgages were granted to owner-occupiers in February, down by a seasonally-adjusted 1.8 per cent compared to January, the fifth consecutive month of decline, Australian Bureau of Statistics data shows.
Economists' forecasts had centred on 1 per cent fall in February home loan commitments.
In trend terms - which the ABS says is a more reliable indicator of underlying movement in the data - the total value of dwelling finance commitments excluding alterations and additions decreased 2.1 per cent in February.
ICAP economist Adam Carr said the lending data would concern the RBA, causing the Bank to reassess the pace of future interest rate rises."It's pointing to a sharp, broad-based decline in lending activity," Mr Carr said.
"That would suggest to me that we're getting to the point where the pace of rate hikes will slow, markedly."The RBA will only hike once more and then ease off."The trend for owner-occupier housing commitments fell by 3.1 per cent, while investment housing commitments increased 0.4 per cent, the ABS said.
Last year's three interest rate rises and an end to the Federal Government's more generous first home-buyer grant at the end of 2009 were blamed for the steady drop-off in mortgage demand.
CommSec economist Craig James said that, while the housing finance figures had been affected by the withdrawal of government stimulus, it should give the central bank reason to hold the cash rate steady."It's time for the RBA to move to the side lines and have a greater assessment of what's going on," he said."They have been more aggressive than what they suggested in their statements and now it's the most aggressive rate hike cycle since 1994."Mr James said he expected the housing figures to continue to underperform over the coming months."It probably isn't going to stop there, with interest rates going up again in the latest month."More people will be on the sidelines doing their sums to see what they can afford to get into the market."Buyers are going to be a little bit more cautious."
The Reserve Bank has since raised the cash rate twice this year, the most recent being at last week's monthly board meeting that took the cash rate to 4.25 per cent and 125 basis points above its 2009 trough.
First homebuyers made up 18.1 per cent of loans granted in February compared to 20.5 per cent in January, and down from a record high of 28.5 per cent in May 2009.
This information was gathered from:
Thinking of buying or selling in Nedlands? Call me anytime.
No comments:
Post a Comment