The average value of home loans in Western Australia has surpassed $330,000 for the first time, prompting industry claims that the second phase of recovery in Western Australia’s property market is under way.
The average home loan to owner occupiers was $330,990 in December, according to official figures released today by the Australian Bureau of Statistics.
Urban Development Institute of Australia WA chief executive Debra Goostrey said the stats suggest that more existing home owners are active in the market.
“With property listings falling more than 30 per cent and declining selling times, existing home owners now have the confidence that they can sell their property more easily,” Ms Goostrey said.
“Property activity was largely focused at the lower end of the market in 2011/12, as first home buyers entered the market in droves.
“Now with signs of Perth home prices increasing in 2012, the second phase of recovery of the property market is commencing with the return of the middle market.”
Ms Goostrey said the number of new home loads to upgraders increased by 7 per cent over the second half of 2012.
The national housing finance picture is not as rosy, however, with the number of new home loans decreasing by 1.5 per cent from November to December, the third consecutive monthly fall.
In dollar terms, home loan approvals were down by 2.7 per cent while loans approved for investors dropped by 2.4 per cent, leaving the December total down by 2.6 per cent from November and up by only 0.2 per cent from a year earlier.
The value of loans approvals had risen strongly in September and October, led by a surge in investor loans which ebbed in November and December.
JP Morgan economist Ben Jarman said there was no evidence that the housing construction sector was turning around in a meaningful way, despite four interest rate cuts by the Reserve Bank of Australia in 2012.
"You're also seeing that from the RBA's credit data," he said.
"While the RBA has been talking about getting preliminary signs that the economy is getting a bit of traction in the expected spots as rates come down, it doesn't seem that anything really compelling is really happening.
"Borrowers who are really sensitive to rate adjustments haven't returned to the market in a meaningful way."
One bright spot in the housing finance figures was that loans approved to build new dwellings went up 1.9 per cent in December.
"That's what the RBA wants to see, they want to see people investing in new housing, rather than just turning over existing housing and running up house prices," Mr Jarman said.