Loan figures confirm housing in doldrums
From: AAP
May 14, 20122:40PM
The outlook for the housing industry remains gloomy after data showing the value of lending to the sector is still heading lower / File
THE outlook for the housing industry remains gloomy after data showing the value of lending to the sector is still heading lower.
The figures from the Australian Bureau of Statistics (ABS) on Monday showed the number of loans approved to home buyers rose by an insignificant 0.3 per cent, after seasonal adjustment, in March.
The value of home loans approved was down by the same margin, while the value of loans approved for investors fell by 1.0 per cent.
Overall, the value of housing loans - including loans to both investors and home buyers - fell by 0.5 per cent in total and by 1.0 per cent excluding refinancing transactions, the third consecutive fall by both measures.
The ABS trend measure of housing finance approvals was down by 0.2 per cent in the month, to be up by 4.6 per cent for the year.
But the trend has clearly flattened - in the most recent six months, the rise on the trend measure was less than 1.0 per cent.
The figures also suggest the recent mild deflation in housing prices is still under way.
Aside from refinancing deals, the average loan size in March was $306,400, compared with a peak of $328,500 in April 2011, a fall of 6.7 per cent.
That's consistent with the latest ABS index of established house prices, which fell by 4.5 per cent over the year to the March quarter.
This stagnation in demand for housing is not news.
However it does underscore the lack of inflationary risk in the interest rate cut by the Reserve Bank of Australia two weeks ago, as well as the scope it has to nudge the cash rate down further is it sees the need.
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