 Alarming decline in homeloan approval
Housing approvals fell by 3.3 per cent in February according to the Australian Bureau of Statistics. A year ago approvals nationally were still up by 34.2 per cent. This weakness in housing approvals, coupled by reduced consumer spending may push the Reserve Bank to raise rates despite that the inflation remain weak, according to economists.
Craig James, CommSec economist said in an interview that most of the weakness was centered on private-sector apartments and houses.
''It is understandable that a period of consolidation is to be expected after what has been a phenomenal run over the last year and given the expiry of the first home buyer boost,'' Craig James said.
James still gave a positive outlook, saying that furniture and home-improvement retailers recorded the best annual gains in more than three years. However, the lack of development displease leading home developers such as Stockland and Mirvac, who demand that more land should be made available.
''Looking forward, the housing sector is likely to cool over the next few months, however, the sharp surge in construction loans over the past year will continue to have multiplier effects through the economy,'' James added.
James further revealed that the latest figures on home prices also indicates that a move to a more neutral interest rate setting could be possible in the next few months.
“Absolutely appalling,'' described the Urban Taskforce of Australia, a body that represents developers and financiers, about the figures for NSW. Taskforce's chief executive Aaron Gadiel, said more work is needed to address what he called the ''serious and sustained structural problems with property development in NSW''.
''This has appalling implications for affordability and housing choice,'' Gadiel is quoted in a statement.
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