Australian Bureau of Statistics (ABS) Housing Finance figures for June show, in trend terms, the number of commitments for owner occupied homes fell 0.8 per cent, compared to the previous month. In seasonally adjusted terms, the number of commitments decreased 3.9 per cent. “Except for the purchase of new dwellings, the decreases in lending were across established and construction of new dwellings and across all states and territories, expect Tasmania”, said Real Estate Institute of Australia (REIA) President, Mr David Airey.
“In trend terms, this is the twelfth consecutive month of falls of housing finance. This is getting close to the highest recorded number of consecutive declines since the thirteen months from April 1994 to April 1995”, he said. The number of first home buyers, as a percentage of total owner occupied housing commitments, decreased to 16.0 per cent in June, compared to 16.2 per cent in May – well below the long-run average of 20.1 per cent and dramatically down from the 27.1 per cent level a year ago.
In trend terms, the value of investment housing commitments remained steady compared to the previous months, however, on a seasonally adjusted basis, there was a 3.6 per cent decrease. “Investment housing has been the bright spark of housing finance in previous months, however even this is no longer the case”, said Mr Airey.
“We are seeing the cumulative effect of six increases in official rates between October last year and May this year. This decision by the Reserve Bank of Australia (RBA) to keep interest rates on hold was justified”, he continued.
“The message for the RBA is abundantly clear, the housing sector needs no further tightening of monetary policy”, concluded Mr Airey.