The rise in housing finance in December is a positive sign but needs action from the Reserve Bank to be sustained, according Master Builders Australia.
Master Builders chief economist Peter Jones said the key finance indicator released this yesterday by the Australian Bureau of Statistics shows that demand for new dwellings is “showing early signs of a pick up in response to the interest rate cuts in November and December last year.”
“Loans for construction of dwellings and purchase of new dwellings, combined, were up 2.1 per cent in December and there was an encouraging lift in investment-related construction loans,” he said.
“Finance commitments remain weak by historical standards but the housing market is beginning to pick itself off the floor as the bring-forward effect of the Government’s ‘Boost’ Scheme fades and first home buyers respond to lower interest rates and more affordable house prices.”
“Although the two recent rate cuts in November and December will help, Master Builders believes the Reserve Bank still needs to do more to boost confidence and maintain a sustainable recovery in residential building.”
