AU Housing shows signs of growth
Property Here - Tuesday, April 16, 2013
AUSTRALIA'S housing sector is in the tentative stages of a recovery as investors and home owners take advantage of low interest rates.
The number of home loans taken out in February rose 2 per cent, the first monthly rise since September last year.
That's despite the percentage of loans given to first home buyers falling to its lowest point in nine years.
Of those who took out home loans in February, only 14.4 per cent were first-home buyers, the lowest level since June 2004.
St George senior economist Jo Heffernan said the rise in approvals was a sign low interest rates were providing a boost for the housing sector.
"We are expecting to see some further pick-up but we would need to see a few more months of data to confirm a pick-up was under way,'' she said yesterday.
Property research firm RP Data says home prices rose 2.8 per cent in the March quarter and Australian Bureau of Statistics figures show building approvals for new homes rose 3.1 per cent in February.
Housing is one of several underperforming sectors that the Reserve Bank of Australia is counting on to improve during the year to help offset an expected slowdown in mining investment.
The RBA cut the cash rate 1.25 percentage points in 2012, bringing it to its current low of 3 per cent.
Builders welcomed February's improvement in home loans but they said more needed to be done to stimulate growth in housing construction.
"The concern is the figure could be another in the volatile series of rises and falls witnessed over the past year,'' Master Builders Australia chief economist Peter Jones said.
CommSec chief economist Craig James said investors were driving the start of a recovery in the sector.
But he said the continued fall in first-home buyers was concerning.
The percentage of loans taken out by first-home buyers has been falling since October when New South Wales and Queensland stopped giving first-home owner grants to people buying established properties.
Read more: http://www.news.com.au/realestate/news/housing-shows-signs-of-growth/story-fncq3gat-1226621365725#ixzz2QaiHUUrs