Housing industry not sated by rise in finance

by Adam Smith12 Jun 2012

Housing finance has seen a second consecutive rise, but the housing industry has claimed recovery 'remains elusive'.

ABS housing finance figures show that housing finance rose a seasonally adjusted 1.2% for April. Finance for the purchase of new dwellings surged 9.3%, while loans for home construction fell 0.6%.

The housing industry has taken little comfort in the rise, however. Master Builders CEO Wilhelm Harnisch called the figures "disappointingly poor".

"What is of concern in the April 2012 housing finance figures is the negative trend estimates for the value and number of commitments. This negative trend vindicates the recent rate cuts by the RBA. If the negative trends do not reverse soon then a further cut from the RBA is necessary to stop the new housing sector from collapsing further," he said.

Harnisch claimed the figures reflected low levels of consumer confidence.

HIA chief economist Harley Dale was more optimistic, saying the "modest rise" was encouraging.

"The number of loans for new housing has largely been bouncing along a bottom for over a year now, but hopefully that situation is coming to an end," Dale said.

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