Housing finance data released this week showed a further slowdown across the sector.
On a seasonally adjusted basis, owner occupier finance commitments for: construction of new dwellings (-7.3%), purchase of new dwellings (-3.2%), purchase of established dwellings (-2.9%) and total owner occupier loans (-3.4%) all recorded falls during March 2010. Over the year to March 2010 only commitments for construction of new dwellings has increased, albeit by only a small percentage, 1.6%. Meanwhile, on an annual basis finance for the purchase of new dwellings is down -21.7%, finance for established dwellings is down -26.0% and total owner occupier loans are down -23.3%.
Source: RP Data
Housing finance data released this week (also)showed a continuation in the trend of fewer housing loans being taken out by owner occupiers (down 3.4 per cent over March), further declines in first time buyer commitments (first home buyers now comprise just 16.1 per cent of all owner occupier housing loans) and a further increase in investors commitments. Investors, based on the value of finance commitments, now represent 32.9 per cent of the market, their highest proportion since February 2005. Source: RP Data
On the Ground, agents are reporting good numbers thru open houses but a tightening of committed purchasers. After several weeks of good media, talking the market up, we are now seeing articles advising caution when purchasing. A speculative Stock Market is also creating jitters as investors pull out and put their trust in cash reserves.
In a positive sign for housing supply, new dwelling approvals jumped 15.3 per cent on a seasonally adjusted basis in March with 16,383 new dwellings approved for construction over the month. Compared to the same time last year dwelling approvals are up 52 per cent, although this is being measured from a very low base. Additionally, the March figures are being dragged upwards by a huge spike in unit approvals which were up 60 per cent compared to house approvals which were up just 0.5 per cent. The unit approvals data can be quite lumpy and the large increase is likely to be due to several large unit developments gaining approval during the month.
In other news, the Reserve Bank has once again increased the cash rate by 25 basis points taking the average standard variable mortgage rate to about 7.4 per cent. The cash rate has now risen over three consecutive months; historically there has never been four rate rises in month to month succession. The Reserve Bank Governor has declared interest rates are now to about average levels providing a hint that interest rates may remain on hold over the coming months. Source: RP Data
Last Months Property of the Month: 1 Malcolm St, Narabeen was snapped up by two local investors. The prime position of this property offering uninterrupted views of the Ocean and with an outstanding rental return was felt to be great buying.
This months property of the month will be featured in next weeks BLOG. Located on Pittwater Rd at Mona Vale and backing onto Mona Vale Golf Course, this 4 bed, 2 bath 2 car home on 620m comes with an inground pool and the serenity of a Golf Course locale. Stay tuned for pics soon.
For your copy of this weeks McGrath Magazine, click the link below.
http://emags.newlitho.com.au/?mcgrath/weekly/22may2010
If you need any assistance or are considering going to market, please call me for your no obligation chat. Steven Purcell on (02) 8914 3215 or mobile 0411 420 100.
Hope to see you at an open home soon,
Regards
Steve
