Big Drop in Home Loans
Recent figures from the Australian Bureau of Statistics show that approved home loans in February fell by 5.6 percent to 45,393. This is much higher than the 1.5 percent drop predicted by economic experts. The February figures are the lowest number of approved home loans since February 2001. In New South Wales, home loans went down by a 14-year low 10.1 percent.
The housing market fell across the board and not just in Queensland wherein massive floods affected the area. The fall of the housing market in Queensland is just a part of why the property market fell in the rest of the country during February, it can be partly attributed to the last official cash rate hike by the Reserve Bank of Australia in November 2010.
It is logical that lower property demands will stem from higher interest rates and housing finance commitments have not improved much to turn the tide. Property market activity is expected to remain slow and the Reserve Bank would not want the property market and consumer spending to boost while the mining industry is surging as well.
The figures are reflective Queensland’s lack of improvement from the floods, the November cash rate hike is also hindering improvements. Queensland is expected to be on the way to recovery during the next few months.
Some of the figures show finance for new property construction went up by one percent while non-refinancing new homes went down by just 3.8 percent. In February, home loans in New South Wales and Victoria went down by 10.1 percent and 4.6 percent respectively. This causes some concern for the RBA for these two states have been steadily performing in 2010.
