Small rise in housing finance approvals in March

Housing finance data released today showed a modest 1.2 per cent increase in the total number of seasonally adjusted loans for owner occupiers to 8,381 in the month of March.

However the number of loans fell by 8.6 per cent over the entire March quarter.

In original terms, lending for construction was lower over the March 2007 quarter, when compared to
the previous year, down 27.2 per cent.

Lending for the purchase of new dwellings was also lower in the March quarter, down 5.3 per cent while lending for established dwellings fell 6.9 per cent.

Australia's peak housing body, HIA, said that the lending update for the construction of owner occupier dwellings in Western Australia has been trending downward for nearly a year .
HIA's Executive Director of Western Australia, Ms Sheryl Chaffer, said that housing finance and building approvals updates over the early months of 2007 portrayed a clear softening ahead for home building.
"The level of activity still remains at healthy levels," Ms. Chaffer said.
"There is, however, a very serious concern as the Western Australian housing market is now experiencing the highest housing affordability hurdle it has ever faced. This situation is placing enormous pressure on first home buyers and renters."
"There was a pick up in the number of first home buyer loans in March, however the proportion of first home buyers was significantly lower than it was in March last year, down from 16.8 per cent to 12.4 per cent." Ms Chaffer added.
On a state by state basis, the total number of seasonally adjusted owner occupied housing commitments increased by 17.8 per cent in the Australian Capital Territory and by 9.6 per cent in the Northern Territory. Modest rises were recorded for Queensland, up 1.5 per cent and New South Wales, up 0.5 per cent. The number of loans fell by 1.5 per cent in South Australia and Tasmania, and
by 0.4 per cent in Victoria.