Demand for home loans slumps in January
From: AAP March 10, 2010 12:07PM Increase Text Size Decrease Text Size Print Email Share Add to Digg Add to del.icio.us Add to Facebook Add to Kwoff Add to Myspace Add to Newsvine What are these?
Economists surprised as new home loans fell for the fourth month in a row / File
Surprise drop in demand for mortgages
Loans to first-time buyers down 21pc
Four RBA hikes hurting demand
DEMAND for new home loans slumped nearly 8 per cent in January against the backdrop of rising interest rates and the end of the Federal Government's more generous first home buyers grant.
In January, 51,056 loans were granted to owner-occupiers, a 7.9 per cent seasonally-adjusted decline on December, according to Australian Bureau of Statistics data released today.
It was a fourth consecutive monthly decline.
Economists had expected home loan commitments to have risen by 2 per cent.
The proportion of loans granted to first homebuyers slipped to 20.5 per cent compared to 21.0 per cent in December.
The Reserve Bank raised the official cash rate for a fourth time to 4 per cent last week.
An economist at financial markets research group 4Cast, Michael Turner, said the decline was due to first home buyers retreating from the market, as the temporary boost to the first home owner grant was wound back.
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"It is not as though it was a massive change in policy - for purchases of established home it only dropped from $10,500 to $7,000,'' Mr Turner said.
"That's not huge, but it seems to have been enough, along with at least 75 basis points of interest rate rises.
"That seems to have taken the incentive away for a lot of first home buyers.''
The number of first home buyers fell to 8316 in January, from 12,054 the previous month, a decline of 3738 or 31 per cent in original terms.
The January result was the fourth straight month of decline and the largest monthly fall in the number of new owner-occupied housing loans since June 2000.
4Cast had predicted a 5.5 per cent decline in new loans for owner-occupied housing for January, the most bearish forecast among market economists and well below the median two per cent increase.
Mr Turner said the data were unlikely to alter the RBA's thinking on interest rates.
"The RBA probably has it factored in that if rates go up and policy measures fade away there would be a reasonable pullback in interest for buying houses,'' Mr Turner.
"I'm not sure if it will have any major policy implications.
"It might scale back expectations for an April rate hike a little bit, but nothing too major.''
From: AAP March 10, 2010 12:07PM Increase Text Size Decrease Text Size Print Email Share Add to Digg Add to del.icio.us Add to Facebook Add to Kwoff Add to Myspace Add to Newsvine What are these?
Economists surprised as new home loans fell for the fourth month in a row / File
Surprise drop in demand for mortgages
Loans to first-time buyers down 21pc
Four RBA hikes hurting demand
DEMAND for new home loans slumped nearly 8 per cent in January against the backdrop of rising interest rates and the end of the Federal Government's more generous first home buyers grant.
In January, 51,056 loans were granted to owner-occupiers, a 7.9 per cent seasonally-adjusted decline on December, according to Australian Bureau of Statistics data released today.
It was a fourth consecutive monthly decline.
Economists had expected home loan commitments to have risen by 2 per cent.
The proportion of loans granted to first homebuyers slipped to 20.5 per cent compared to 21.0 per cent in December.
The Reserve Bank raised the official cash rate for a fourth time to 4 per cent last week.
An economist at financial markets research group 4Cast, Michael Turner, said the decline was due to first home buyers retreating from the market, as the temporary boost to the first home owner grant was wound back.
Start of sidebar. Skip to end of sidebar.
End of sidebar. Return to start of sidebar.
"It is not as though it was a massive change in policy - for purchases of established home it only dropped from $10,500 to $7,000,'' Mr Turner said.
"That's not huge, but it seems to have been enough, along with at least 75 basis points of interest rate rises.
"That seems to have taken the incentive away for a lot of first home buyers.''
The number of first home buyers fell to 8316 in January, from 12,054 the previous month, a decline of 3738 or 31 per cent in original terms.
The January result was the fourth straight month of decline and the largest monthly fall in the number of new owner-occupied housing loans since June 2000.
4Cast had predicted a 5.5 per cent decline in new loans for owner-occupied housing for January, the most bearish forecast among market economists and well below the median two per cent increase.
Mr Turner said the data were unlikely to alter the RBA's thinking on interest rates.
"The RBA probably has it factored in that if rates go up and policy measures fade away there would be a reasonable pullback in interest for buying houses,'' Mr Turner.
"I'm not sure if it will have any major policy implications.
"It might scale back expectations for an April rate hike a little bit, but nothing too major.''
