The residential housing market in Australia is worth an estimated $4.86 trillion, nearly three and a half times the value of the country’s stock market and combined superannuation funds, according to rpdata’s latest report – but growth in private sector housing credit remains at record lows.
According to rpdata’s Property capital markets report, summer 2013, the impact of global financial uncertainty has played havoc with consumer confidence, which has, until quite recently ‘remained surprisingly low’. Australians appear to be more focussed on playing down debt and rebuilding bank balances, with the national savings rate at its highest level for more than 25 years.
“A record low level of growth in private sector housing credit in 2012 was reflective of both lower demand for new housing loans and an emerging mood among home owners to pay off their home loans at a more rapid pace,” says the report.
“Nonetheless, the positive sentiment contemplated as a consequence of the long and deep interest rate easing cycle, initiated by the RBA in November, 2011, is gradually flowing through, as evidenced by an improvement in housing market conditions and consumer sentiment.”
Though potential for a further decrease remains, the cash rate currently sits at the same level it was at in mid-2009, when sharp rate cuts were made to lessen he initial impact of the GFC.
However, the report says, early signs for 2013 are fairly encouraging.