Home Loans Outgrow Inflation
Recently released home finance data from the Australian Bureau of Statistics has shown the number of home loans taken out in the 2013 Financial Year grew four per cent from the previous financial year.
Loan Market director Mark De Martino said that the 51,001 finance commitments in June 2013 was particularly positive because it was 12 per cent higher than June 2012 and was the highest total in the last 3 ⅔ years.
Mr De Martino said the financial year-on-year result, which outgrew the average inflation rate, was indicative of the lower interest rate environment during the period and an important rebound from the sluggish economic numbers of past years.
“The 2013 home finance market has been dominated by those refinancing their properties, investing in property or upgrading their homes. And we’ve seen lenders moving quite competitively to service these types of customers,” Mr De Martino said.
Mr De Martino said that the mining and resource states were the standout performers of the last financial year with Western Australia showing 13 per cent growth and Queensland growing 6 per cent. New South Wales was the only state to write fewer finance commitments in the financial year.
“In the 2012 Financial Year we saw the removal of many incentives for First Home Buyers to enter the market. In the 2013 Financial Year first home buyers continued to sit on the sidelines but the activity of investors and refinancers carried the market to growth.”
Mr De Martino said that given the rate reduction by the Reserve Bank of Australia yesterday (RBA) and with the conclusion of the federal election, first home buyers were poised to make a comeback soon.
“As time passes and the pool of prospective first home buyers grows, it’s becoming increasingly likely we see this segment of the market return. Lower interest rates and a newly formed government will encourage first home buyers back in the 2014 financial year,” he said.
ABS Housing Finance Commitments - June 2013.
FY13 vs FY12