Australians borrow less to buy homes in May

Sunday 11 July 2004

SYDNEY: Australians borrowed less to buy homes in May, an outcome likely to please the central bank and support expectations there is no urgency for a rate increase.

By The Landlord

The Bank left rates unchanged for a seventh consecutive month this week.

Housing finance by volume fell 2.6 per cent in May, exceeding forecasts of a 1.0 per cent decline. The value of loans, excluding those to investors, fell for the first time in four months, dropping 1.2 per cent. The figures are seasonally adjusted.

The central bank has been worried about unprecedented levels of household debt and economists say any clear rebound in demand for housing and home prices could see the central bank increase interest rates in 2004 as it did last November and December. Finance commitments by investors to buy or build properties for rent or resale – a particular area of concern for the Reserve Bank – fell 2.0 per cent in May, the Australian Bureau of Statistics said.

Rate-sensitive September 90-day bank bill futures implied a yield 23 basis points above the current 5.25 per cent cash rate after the housing data. The contract had been fully pricing a rate increase earlier this week.

Read More - Opens in a new window
Commenting is closed

House Prices

House price drops are short-lived - Alexander

Periods of house price decline are rare and "short-lived", says economist Tony Alexander, amid forecasts of a drop of 10%-15% this year.


Resilience needed in face of change

The Reserve Bank says the commercial property sector is vulnerable to the Covid-19 crisis. But PMG Funds' chief executive believes that while there’ll be short-term pain, the biggest long-term impact will be structural change.


Mortgage lending slumps to record low in April

Mortgage lending fell to its lowest level on record last month as the property market ground to a halt during the Covid-19 lockdown.

Site by PHP Developer