It may be too soon to celebrate a recent surge in housing finance, but a property analyst has indicated the result seems to favour property bulls.
SQM Research managing director Louis Christopher has said the recent rise in housing finance numbers for December bodes well for the housing market, and could signal the start of a recovery. Christopher said the data showed a "clear, rising trend of housing finance approvals".
"It appears this trend started around June 2011 from what was very, very low levels of activity. Notably, there has been a clear pick up in the overall number of first homebuyers, which has been commonly seen in recent years as a sign that the market might be recovering on the back of new demand," Christopher said.
In spite of this recovery, Christopher warned that "no one should be getting overly excited yet", as housing finance "just crossed over" lows hit during 2008.
Christopher also warned that increased NSW first homebuyer activity as a result of stamp duty concessions could have skewed December figures.
"There is a risk here that NSW may drop off again, bringing the overall numbers down. This has happened after the end of each successive housing stimulus package," he said.
Bank rate hikes could also serve to scuttle or delay any recovery, Christopher said. However, Christopher claimed that the figures seemed to indicate a positive trend.
"we will give this result largely in favour of the bulls. There does seem to be some evidence pointing to drivers beyond NSW first homebuyers," he said.
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