Here’s what happened in the property markets this week…
Housing finance data for February 2013 was released earlier this week by the Australian Bureau of Statistics (ABS).
The data showed an increase in the number of owner occupier housing finance commitments of 2.0% over the month with both refinance and new loan commitments rising by the same amount.
Although the monthly rise was quite significant, year-on-year owner occupier commitments were only 1.5% higher with the increase driven by a decent rise in new loan commitments (up 6.8%) compared to an -8.1% fall in refinance commitments. The total value of housing finance commitments rose by 1.8% for investment purposes over the month and by 1.2% for owner occupation.
Demand for housing finance has been significantly stronger for investors rather than owner occupiers.
Year-on-year, the value of owner occupier finance commitments has risen by 5.3% compared to a 15.4% increase in investment loan commitments.
First home buyers continue to show low levels of activity.
Although the number of first time buyer commitments rose by 2.0% over the month to 5,930, as a proportion of all owner occupier commitments they accounted for just 14.4%, their lowest proportion since June 2004.
Across individual states, the slump in first home buyer activity continues to be most noticeable in New South Wales and Queensland. Over the month, first home buyers accounted for just 7.8% and 10.4% of owner occupier finance commitments respectively.
The Reserve Bank (RBA) released the minutes of its April Board meeting earlier this week. At the board meeting, the RBA board decided to keep official interest rates on hold at 3%. Relating to the housing market, the minutes specifically noted:
‘Conditions in the housing market had continued to improve. House prices increased again over March, to be 4¼ per cent above their mid-2012 trough, auction clearance rates had moved higher and there were signs of somewhat stronger growth in housing loan approvals. The Bank’s liaison with home builders suggested that demand for new housing had been a little more positive of late, with a rise in activity reported in most capital cities.’