As investors and home owners are taking advantage of low interest rates, Australia’s housing sector is in the uncertain stages of a upturn.
The first monthly ascend since September last year is only the number of home loans taken out in February rose 2 per cent.
That’s in spite of the percentage of loans granted to first home buyers falling to its lowest point in nine years.
The lowest level since June 2004 is the 14.4 per cent were first home buyers of those who took out home loans in February.
The rise in approvals was a sign low interest rates were providing a boost for the housing sector said St George senior economist Jo Heffernan.
“We are expecting to see some further pick up from here, but we would need to see a few more months’ data to confirm a pick-up was underway,” she said.
According to property research firm RP Data Home prices rose 2.8 per cent in the March quarter while building approvals for new homes rose 3.1 per cent in February, says the Australian Bureau of Statistics.
Housing is one of numerous underperforming divisions the Reserve Bank of Australia is including on to progress during 2013 to facilitate counterbalance a projected hold up in mining investment.
The RBA reduce the cash rate 1.25 percentage points in 2012, conveying it to its present low level of three per cent.
But at the same time as builders welcomed February’s enhancement in home loans, they said more desired to be done to motivate growth in housing construction.
“The concern is today’s figure could be another in the volatile series of rises and falls witnessed over the past year,” Master Builders Australia chief economist Peter Jones said.
“The Reserve Bank must continue to act by cutting interest rates and ensuring
a sustained building industry recovery can take place and boost the non-mining economy,” Mr Jones said.
Investors were driving the nascent recovery in the sector said CommSec chief
economist Craig James.
But he said the continued fall in first home buyers was concerning.
Since October the percentage of loans taken out by first home buyers has been falling when New South Wales and Queensland discontinued providing out first home owner grants to people buying established properties.
“Perhaps the state governments need to rethink about the way that the incentives are provided so they can provide some assistance to the market,” Mr James said.
Bu Ms Heffernan expects first home owner numbers to improve as 2013 rolls on.
“It (the weakness) has continued longer than we would have expected following those state government changes,” she said.
“But at some point you would expect to see that turn.”