New home sales fall in December, figures show

The uptake of home loans across Australia fell away in December 2011, new figures have confirmed.

According to the Housing Industry Association (HIA), the demand for mortgages was low, despite the fact that the Reserve Bank of Australia (RBA) had sanctioned two cuts to interest rates in November and December.

Chief economist at the HIA Harley Dale suggested that there were a number of factors behind the poor showing. Indeed, the ongoing eurozone turmoil was a hindrance, while many house hunters were unsure whether Australia's major banks would pass the interest rate cuts on.

"Short-term monetary and fiscal policy stimulus together with a revitalised program of longer term structural reform is required in early 2012," he commented.

Sales of detached houses declined in New South Wales, Queensland and Victoria, but actually grew in Western Australia and South Australia in December, the statistics indicated.

The latest RP Data-Rismark Home Value Index showed that the average value of an Australian home fell by 0.5 per cent in the final quarter of 2011.

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