Approvals for home loans in Western Australia have risen by 10 per cent over the past 12 months, but the strong growth appears to be slowing down, according to economists.
Approvals for home loans in Western Australia have risen by 10 per cent over the past 12 months, but the strong growth appears to be slowing down, according to economists.
Data released by the Australian Bureau of Statistics last week showed there were 7,564 home loans approved in WA in January, a 1.8 per cent gain on the previous month.
A year ago, the ABS said there were 6,901 home loans approved in January in WA.
“There are some important signs emerging from the state by state breakdown of new home lending,” HIA economist Diwa Hopkins said.
“Most notably, the strong growth experience in 2013 in Western Australia appears to be moderating.
“We wouldn’t be discouraged by this development and it is actually in line with our forecasts.
“We’re expecting the recovery in residential construction to spread to and gather momentum in other key states, including Queensland and South Australia, while the pace of improvement eases in NSW and WA.”
Nationally, the 51,054 home loans issued for owner occupiers was the highest level reached in four years, a 12 per cent gain on January 2013.
It was a slight gain on December 2013 however, when there were 51,045 home loan approvals, the ABS said.
“As long as interest rates remain low and lenders continue their aggressive moves, we’re going to see more growth and more activity in the real estate and finance markets,” Loan Market director Mark De Martino said.
“We’re coming off a low base but these numbers are a clear indication that consumer appetite for home finance is growing.
“The fact is that a larger number of home owners and buyers are active in the market.”
The total value of home-related lending fell by 0.4 per cent in January, but remains up 26.9 per cent year-on-year.
The data showed that just 13 per cent of all dwellings financed in Australia in January were for first home buyers, while historically first-time buyers make up 18 per cent of all housing loans.
CommSec economist Gareth Aird said strong house price growth and a soft national jobs market had contributed to the lack of first home buyer activity.
“The housing market dynamics that have been in play over the past year are still present,” Mr Aird said.
“Mortgage rates are near record lows, population growth is strong, house prices have risen and residential construction has yet to pick up noticeably.
“The good news is that the building approvals data over the last six months indicates that residential construction is set to lift substantially over the period ahead.”
