HIA, Australia’s largest building industry association, said that it was encouraging to see October mark the first rise in home lending since January, especially as the result pre-dates further interest rate cuts in November and December.
HIA Chief Economist, Harley Dale said that the total number of owner occupier loans increased by 1.3 per cent in October to 48,229.
“The number of loans was still 24 per cent down on October last year, a sign of just how weak the home lending market is. Nevertheless, amidst a constant barrage of negative updates on the economy we did get a rise, albeit a small one,” Harley Dale said.
The number of loans for construction/purchase of new dwellings eased by 0.6 per cent in October with the construction component down further (-2 per cent) and the new purchase component up moderately (+3.5 per cent). Loans were down by 25 per cent on October 2007.
“As we receive further updates on the December 2008 quarter and March 2009 quarter it will be important to see clear evidence of an improvement in leading housing indicators like housing finance, new home sales, and building approvals. We saw a modest rise in two out of three of these in the month of October, but it is very early days,” said Mr Dale.
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