Finance Still Strong, Except For First Home Buyers

The Age

Saturday November 29, 2003

Enzo Raimondo, Chief Executive of the Real Estate Institute of Victoria

Official ABS figures for the September quarter reveal, despite the recent interest rate rise, housing finance was up by 4 per cent to more than $11.6 billion in September. The average loan size continued to grow strongly, increasing by $3500 to $189,100 in September. The number of first home buyers continued a pattern of general decline, since the high of 25.8 per cent in July 2001, to a record low of 13.3 per cent in September. The results provide further confirmation both owner-occupier and investor interest in the housing sector remains at unprecedented highs.

Interest rates and employment low and demand for housing strong.

Melbourne's real estate market is being driven largely by the strength of the economy and low interest rates, combined with high levels of demand.

Unemployment is at 13-year lows, at 5.4 per cent (the lowest in Australia) and been below the national average for 41 consecutive months. Low interest rates continue to make housing affordable, with the 0.25 per cent rate rise having little impact.

Building approvals level out Victoria's building sector contracted in the September quarter, with ABS figures showing the number of houses, flats and townhouses approved for construction fell 5.2 per cent to 11,971 - 13.3 percent below the September quarter last year. These figures are mainly due to higher building costs, as demand continues to be strong.

Lending finance bounces back, showing market is healthy Figures released by the ABS in October showed home loans bounced back in August, driven by increasing numbers of homeowners refinancing properties. The figures show the number of home loans rose 2.1 per cent, following a slight fall in July. Loans to buy new homes dropped 5 per cent, while borrowing to build homes rose 0.1 per cent, and loans to buy established homes increased 2.6 per cent.

These statistics demonstrate the market remains healthy, with high stock levels at present typical of the spring selling season.

For further property information go to the REIV's website www.reiv.com.au.

© 2003 The Age

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