Housing loans grow 4.8%, auction results improve again

The total value of dwelling finance commitments, excluding alterations and additions, increased by a seasonally adjusted 4.8% to $23.8 billion during September, according to the latest figures from the Australian Bureau of Statistics.

The value of owner occupied housing has grown by 6.7% to $17 billion, while the value of fixed loans for investment housing has decreased slightly by 0.1% to $6 billion.

The number of dwelling commitments for owner occupied housing rose by 5.1% to 65,505, while the commitments for construction of new dwellings rose by 8% to 7,221.

Purchases of new dwellings fell by 0.6% to 2,745, while purchases of established dwelling rose by 5% to 55,538.

Meanwhile, auction results have continued to remain strong over the past weekend, with the market experiencing a boost in the number of properties on the market.

Real Estate Institute of Victoria chief executive Enzo Raimondo said in a statement the market will continue to perform well, as it always does this time of year, due to the increased number of houses on the market.

“It is normally the case that there is an increase in the number of homes offered at auction around this time of the year and that is certainly the case this year with another 2,400 auctions expected over the next three weekends, providing purchasers with a greater range of choices and opportunities.”

In Melbourne a total of 522 auctions were held, with a total of 422 homes sold resulting in a clearance rate of 81%. Sales reached a total of $281 million.

Sydney recorded a total of 163 properties sold, out of the 237 put on the market over the weekend, results in a clearance rate of 65%. Total sales reached $144 million.

In Brisbane, only 18 properties were put on the market, with 13 sold resulting in a clearance rate of 68%. In Adelaide, only 10 properties were sold resulting in a clearance rate of 53%, with sales totaling $6 million.

Meanwhile, prime ministerial recognition of Australia’s housing shortage problem has been welcomed by the managing director of the Housing Industry Association, Shane Goodwin.

Prime Minister Kevin Rudd has offered Commonwealth funding to states and territories for urban infrastructure development.

“The shortage of new homes didn’t happen in the past year; it’s been going on for most of the current decade,” Goodwin says.

“Some have the mistaken belief that builders are living in the lap of luxury. But if building homes was a sure-fire bet, why has Australia been under-building new homes for years?”

“It has been commonplace to blame the states for not making sufficient land available for residential development. But providing the roads, public transport, schools, hospitals, child-care and community services to accommodate increases in population numbers is a very expensive business. Most of the funding responsibility falls on the shoulders of state and territory governments.”

Goodwin says the expansion of the housing market will rely on extra funding from the Government.

“If the Commonwealth is prepared to shoulder some of the budgetary responsibility for urban infrastructure, then the federal funds must replace some of the current state and local government levies applied to new housing.”

“Failure to cut supply-sapping development levies would see consumers continue to vote with their feet by trading in the established housing market.”