Recent figures released by the Australian Bureau of Statistics indicate that, even though the housing market continues to show signs of recovery, many still do not have the confidence to take the plunge and invest in a home.
Housing construction loan applications fell sharply in the final months of 2012, indicating a reluctance among first-time buyers to take on any housing-related debt.
Commitments for the purchase of new dwellings fell by 10.3 per cent in November, while commitments for the construction of new dwellings was down 1.8 per cent.
Peter Jones, chief economist at Master Builders Australia – the country's largest property professionals' association – says the overall recovery of the sector could hinge on the short-term confidence of buyers to enter the market, and is urging the government to incentivise this.
The recent interest rate cut to three per cent appears to have stimulated some degree of action within the market, and Mr Jones is now suggesting further rate cuts in February.
