Recently released figures from the ABS show that the month on month level of housing finance commitments increased slightly in December.
The total value of dwelling commitments reached $21,274m in December, according to the ABS, which represented a 1.1% increase on November’s result.
Owner occupied dwelling commitments increased by 1.4% to $14,659m, while investment housing commitments rose by 0.5% to reach $6,705m.
“In trend terms, increases were recorded in all states and territories, except the Northern Territory where commitments declined,” said Real Estate Institute of Australia (REIA) president David Airey of the ABS figures.
“Increases were evident for the purchase of established dwellings (1.2% in trend terms), the purchase of new dwellings (1.0% in trend terms) and construction of dwellings (1.4% in trend terms).”
The REIA however commented that the percentage of first home buyers, despite rising from 15.6% in November to 15.8% in December, was well below both the long-term national average of 20.1%.
“We are seeing the cumulative effect of seven increases in official rates between October 2009 and November 2010,” said Airey. “The continuing low levels of finance commitments to first home buyers is a concern. First home buyers have been hardest hit by the effect of interest rate rises.”
Mortgage Choice spokesperson Kristy Sheppard points out that the total value of commitments has now risen for four consecutive months and that, in seasonally adjusted terms, commitments are up 2.5% as a whole.
“Although things were a little slower in January 2011, at the moment we are cautiously confident that this year will be an overall improvement on 2010 in many respects,” she says.“With housing price growth remaining subdued, cash rate rises now looking to be pushed back a little and wages increasing at a healthy pace, the current buyer’s market holds much potential.”
