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All roads lead to stable interest rates

8 Aug 14

The Real Estate Institute of Australia (REIA) says the latest housing finance figures released by the Australian Bureau of Statistics (ABS) reflect a stable market in which interest rates should remain on hold.

The figures for June 2014 show, in trend terms, that the number of owner-occupied finance commitments increased by 0.2 per cent, following similar monthly increases over the first five months of 2014.

If refinancing is excluded, in trend terms for June, the number of owner-occupied finance commitments fell by 0.1 per cent – the fifth consecutive drop this year.

REIA President, Peter Bushby says, “Increases were recorded in Queensland, Western Australia, South Australia, New South Wales, Tasmania and the Northern Territory which had the biggest rise of 1.3 per cent. Falls were recorded in Victoria and the Australian Capital Territory which the biggest fall of 0.6 per cent.”

“In trend terms, the number of commitments for the construction of new dwellings climbed 0.3 per cent, the purchase of established dwellings increased by 0.1 per cent and the purchase of new dwellings increased by 0.8 per cent.”

The value of investment housing commitments again increased but by a more moderate rate of 0.1 per cent in June, following over three years of consecutive monthly increases.

“The proportion of first home buyers in the number of owner-occupied housing finance commitments increased to 13.2 per cent compared to 12.6 per cent in May.”

“The June 2014 lending figures indicate a stable market and taking into consideration the jump in unemployment to a 12 year high, signal a period in which interest rates should remain at their current levels,” concluded Mr Bushby.