14/04/2008 - 11:08

WA weakest state for new home loans

14/04/2008 - 11:08

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Western Australia is leading the national slump in housing finance with new figures showing an 11.6 per cent fall in the month of February, according to the Bureau of Statistics.

WA weakest state for new home loans

Western Australia is leading the national slump in housing finance with new figures showing an 11.6 per cent fall in the month of February, according to the Bureau of Statistics.

Figures show the demand for home loans nationwide has fallen for the first time in four months and that owner-occupied home loans have dropped by a seasonally-adjusted 5.9 per cent in February to nearly 64 thousand.

Following Western Australia, South Australia dropped by 7.4, Queensland 4.2, NSW 3.9, the ACT 3.1 and Victoria 2.1 per cent.

Tasmania was up 2.2 and the Northern Territory 0.7 per cent.

The drop in home lending in February is the beginning of further falls to come, according to peak building and construction industry organisation Master Builders Australia (MBA).

Mr Wilhelm Harnisch, Master Builders' chief executive officer, said the two rate rises this year and the November 2007 rate rise are now having a significant impact on home buyers' confidence and can only result in further delaying the housing recovery well into 2009.

"The biggest risk for the residential building market is home buyers' confidence." said Mr Harnisch.

The sub-prime crises and increasing uncertainty about where interest rates are heading will be the key drivers of home buyer's behaviour over the next six months."

"The clear message for the Reserve Bank is to put further rate rises on hold. The housing sector does not need another rate rise."

According to MBA, the total number of dwellings financed for owner occupiers, seasonally adjusted, dropped by 5.9 per cent in February 2008, to be the same as a year ago.

The value of lending to finance the purchase of investment housing fell by 9.5 per cent in February, to be down marginally on a year ago, indicating that investors have shied away from the market.

 


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