News Article

Rate rises hit home loans, construction sector -Builders

15/04/2008 - The drop in home lending in February is the beginning of further falls to come, according to peak building and construction industry organisation Master Builders Australia. Mr Wilhelm Harnisch, Master Builders' Chief Executive Officer, said "The two rate rises this year and the November 2007 rate rise are now having a significant impact on home buyers' confidence and can only result in further delaying the housing recovery well into 2009."

"The biggest risk for the residential building market is home buyers' confidence. The sub-prime crises and increasing uncertainty about where interest rates are heading will be the key drivers of home buyer's behaviour over the next six months."

"The clear message for the Reserve Bank is to put further rate rises on hold. The housing sector does not need another rate rise."

* The total number of dwellings financed for owner occupiers, seasonally adjusted, dropped by 5.9 per cent in February 2008, to be the same as a year ago.

* The number of loans for the construction of dwellings rose by 0.6 per cent in February, to be marginally higher than the same month last year.

* The number of loans for the purchase of new dwellings rose by 0.3 per cent in February, to be down 2.2 per cent on the same time last year.

* The number of loans for the purchase of established dwellings fell by 6.6 per cent in February, to be marginally higher than the same time last year.

* The value of lending to finance the purchase of investment housing fell by 9.5 per cent in February, to be down marginally on a year ago, indicating that investors have shied away from the market.

Source: AAP NewsWire

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