Mortgage uptake rises in September, new figures show

Monday 12 November 2012

Article by Mozo

The total number of owner occupied housing finance commitments rose by 0.9 per cent in seasonally adjusted terms in September 2012.

New figures released by the Australian Bureau of Statistics (ABS) showed an encouraging increase in the number of mortgages being approved across the country during the month.

Lower interest rates have no doubt contributed to this upturn, as the national cash rate has fallen significantly in the past year and now stands at just 3.25 per cent.

The latest reduction was only made in October, so there is every chance that home loan uptake will grow even further when the ABS makes its next announcement.

Despite the rise, the Housing Industry Association (HIA) believes the results are "very patchy".

Chief economist at the organisation Dr Harley Dale said the number of mortgages issued to people who plan to buy a new house was encouraging, but construction loan approvals are still at their lowest point since January 2012.

"It really was a mixed bag for housing finance outcomes in the month of September 2012," Mr Dale remarked.

"At least some areas of finance for property are looking a little better, but a broad-based recovery is proving elusive."

The HIA confirmed last week that building activity dropped for the 29th consecutive month in October, which was an obvious disappointment.

That said, the rate of decline did slow down during the month and property experts are hoping that things will soon pick up.

Mr Dale believes now is a great time for Aussies to build their dream home – if they are in a position to do so financially.

He stated there is a very competitive market, borrowing costs are lower than in previous years and there is greater availability of tradespeople.

Unsurprisingly, the demand for home construction loans varied greatly between each state.

While demand for finance was up by 28.1 per cent in Tasmania and 5.1 per cent in New South Wales in September, there was a 9.1 per cent drop in Victoria and 11.8 per cent fall in South Australia.

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Mortgage uptake rises in September, new figures show

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