Australians still property obsessed
Sunday, September 10th, 2006
Latest figures from Australia show that despite one of the highest bank rates in the OECD, they are still keen to borrow more. HOME loan approvals increased again in July, as jobs growth, rising wages and tax cuts allowed people to borrow more. The news is further evidence that the May interest rate rise failed to slow borrowing.
Home loan approvals have increased but first home buyers are paying higher interest rates and petrol prices, and borrowers are taking out smaller loans.
Housing finance commitments for owner-occupied housing rose 0.9 per cent, seasonally adjusted, to 64,153. But the total value of housing finance commitments fell by a seasonally adjusted 1.4 per cent in July, to $20.2 billion, driven by a 7.2 per cent fall in investor loans.
The percentage of loans to first home buyers was down again, and now represents just 16.7 per cent of total owner-occupied loans.
Housing Industry Association chief economist Harley Dale said the first home buyer market was going ‘backwards in a climate of higher interest rates, constraints in land supply and unwarranted fees, taxes and charges imposed on new housing’.
Master Builders Association chief economist Peter Jones said the upturn in lending construction (loans for building dwellings rose 0.2 per cent in the month) would be ‘snuffed out as the impact of higher interest rates flows through’.
Despite increasing interest rates it seems that the Australian populace still haven’t got the message. Much of the recent wealth has been connected to the rapid increase in commodity prices – and these are now predicted to fall over the next few years.