Housing finance approvals for the purchase of established dwellings picked up modestly in March, with lending for the construction and purchase of new houses showing a reversal of last month's fall, according to national building and construction industry body, Master Builders Australia.
Master Builders' Chief Economist Peter Jones said that the housing finance figures, which predate the release of good news on inflation and reduced interest rate speculation, are "encouraging to the extent that they show a housing market beginning to stabilise."
"With interest rates on hold, the combination of cooler house prices and rising incomes should ease the housing affordability constraint and encourage first home buyers and upgraders back into the market," Mr Jones said.
Finance commitments for construction and purchase of new dwellings combined increased by 3 per cent in March, a rise of 4.4 per cent over the year.
"The value of lending to finance the purchase of investment housing fell by 5 per cent in March but is up 5.8 per cent on a year ago as investor-driven activity begins to consolidate after a lengthy four year downturn," Mr Jones said.
"In a welcome development, the trend in New South Wales housing finance commitments is in line with the national trend, a finding supported by the Master Builders' National Survey of builders."
- The total number of dwellings financed for owner occupiers, seasonally adjusted, rose by 1.3 per cent in March 2007, to be 5.6 per cent up on the same time a year ago.
- The number of loans for the construction of dwellings rose by 1.4 per cent in the month, to be up 1.9 per cent on the same month last year.
- The number of loans for the purchase of new dwellings rose by 5.7 per cent in March, and is 8.3 per cent higher than the same time last year.
- The number of loans for the purchase of established dwellings rose by 1.1 per cent in March, to be 5.8 per cent higher than the same time last year.
