Property statistics released today revealed a mixed bag for the sector, with the total value of home sales plunging over the last financial year, despite a fifth consecutive month of rises in home loan approvals.
The total value of home sales plunged more in Western Australia than any other state or territory except Queensland over the last financial year, according to research released today by analysts RP Data.
RP Data said total dwelling transaction values had fallen by 22.6 per cent over the past financial year in WA, compared to a national figure of 18.2 per cent over the same period.
But commentary around the Australian Bureau of Statistics’ home finance numbers, also released today, indicated the market may be stabilising as talk of an interest rate rise wanes and Australians are encouraged to borrow more.
The Australian Bureau of Statistics (ABS) said total housing finance by value rose 1.0 per cent in August, seasonally adjusted, to $20.848 billion.
JP Morgan economist Ben Jarman said the figures showed the housing sector was stabilising rather than rebounding.
"It certainly means it's not falling into a hole," Mr Jarman said.
"In the last few months worth of data, the housing finance figures have benefited from the perception that the RBA (Reserve Bank of Australia) won't be doing much in the near term.
"So, if you went back to the start of this year, the RBA didn't hike rates but there was all the forecast and all the language were making noises that you would get a couple of hikes this year.
"Those aren't being delivered and things offshore have turned a little bit sour.
"What you've seen in the last few months in the home loans data is these fading expectations are helping out and people are coming back and they are happy to take on new debt.
"We're kind of calling this a mini-rally, but don't think that this is the start of a tearaway in the housing market.
"There's still a lot of uncertainty globally and that's what's keeping the RBA on the sidelines."
Mr Jarman said JP Morgan still expected the RBA not to change the cash rate from its current 4.75 per cent until at least the middle of 2012.
"You've got a lot uncertainty offshore counterbalancing the domestic inflationary situation here and we see the RBA not doing very much for a while."