Australian Bureau of Statistics housing finance data released last week points to a recovery in the home loan market. Housing finance for owner-occupiers rose 4.4 per cent in May, following a 4.6 per cent increase in April. Two positive months in a row have brought hope of a possible revival in the mortgage market after home loan commitments fell in the first quarter. Lower prices and steady interest rates appear to be luring cautious households into the market.
The ABS reported that the total value of owner occupied housing commitments excluding alterations and additions rose 0.1 per cent in trend terms and the seasonally adjusted series rose 2.2 per cent in May compared with the month before.
Property industry groups have spoken out largely against the government’s carbon tax, with concerns the tax will penalise new home buyers and small business, with construction costs and house prices set to rise. The Housing Industry Association voiced its concern that families buying a new home would now face additional building costs and higher mortgage payments. While the Urban Development Institute says it is unfair that the carbon tax will increase the price of energy-efficient new homes. The Property Council of Australia told their members that although there were some positives, the construction industry would shrink.
And now to rents. The RP Data June quarter Rent Report showed that rental rates increased by 2.9 per cent for the past year, tracking below average. The national median rental rate is currently $360, with capital city median rental rates at $380.
And finally land sales. The Housing Industry Association - RP Data Residential Land Report for the March quarter found the volume of land sales fell to a record low in early 2011. Sales fell 6 per cent over the March quarter and were 43 per cent lower when compared to the March 2010 quarter. However, the weighted median land value in Australia increased by 0.8 per cent in the March quarter this year, driven by growth of 2.7 per cent in the median value for regional Australia.
Now First National Real Estate, CEO, Ray Ellis provides us with a mid-year update on the property market outlook for Sydney and Melbourne.
And that is the Real Estate Report for Monday the 18th of July. Thanks for joining us, I’m Melissa Beaumont Lee for the Finance News Network.
