Recent figures from the Australian Bureau of Statistics have revealed that the number of new home loans continued to decline in February.
The downward trend in home loans has brought finance commitments to their lowest level in six years, according to Adrian Kelly, president of the Real Estate Institute of Australia (REIA).
“Overall the figures for February 2019 show, in trend terms, that the number of owner-occupied finance commitments, excluding refinancing, decreased by 1.4% – the 17th consecutive month of decreases and the lowest since January 2013,” said Kelly. “In trend terms, decreases were recorded in all states and territories except Tasmania, which had a modest increase of 0.6%. The largest decrease of 3.2% was in the Northern Territory. The proportion of first-home buyers, as part of the total owner-occupied housing finance commitments, decreased in February to 17.7% from 17.9% in January.”
Kelly said apprehensions about blanket changes to national property tax policies may be behind the drop in new home loans.
“There are a number of reasons for the continued decline in housing finance, one of which is the concern about changes to property taxation and its impact should there be a change in government. There is a clear risk that the decline in activity in the residential property market will become a major drag on the economy,” Kelly said.
