The total number of home loans in Western Australia dropped more than the national average as lending for construction of new dwellings point to a rough road ahead, new figures show.
The Australian Bureau of Statistics today said that the number of WA home loans in January slumped 11.1 per cent, compared to a 7.9 per cent drop for the country.
The drop in home loans comes as the federal government removed the first home buyers boost and several recent interest rate rises.
Lending for construction of new dwellings was up by 96.8 per cent in the three months to January 2010 compared to a year ago, but Housing Industry Association professional services advisor David Endersby said signs ahead are not promising.
"The first home buyer market continues to soften with the proportion at 23.5 per cent of the total market in January 2010, down from a peak of 31.4 per cent in September 2009," he said.
"The home buyer market in WA is now reacting to the ongoing speculation on further interest rate rises and voting with their feet.
"The HIA believes that the resource led recovery may be much softer than expected and the Reserve Bank will need to show real consideration of the sector in any future decisions to increase rates further."
