First home buyers are gaining confidence, despite the fact that the total number of loans for owner occupiers eased by slightly in October 2007 to be just lower than a year earlier, according to figures released this week.
The number of first home buyer commitments as a percentage of total owner occupied housing finance commitments increased from 17.7 per cent in September 2007 to 18.7 per cent in October 2007.
Seasonally adjusted, the total value of dwelling finance commitments excluding alterations and additions increased 1.7 per cent in October, compared with September 2007.
Owner occupied housing commitments increased 1.1% and investment housing commitments increased 2.9 per cent.
HIA's Chief Economist, Harley Dale said that lending on the new home front had remained effectively flat over 2007 to date, highlighting the price pressures evident in both the existing housing market and rental markets.
"There has been no recovery in lending for the new owner occupier market over 2007 and despite a lift in the month of October, overall lending for new investment properties is still falling. This suggests no short term alleviation in the large gap between housing supply and demand even before the full impact of higher borrowing costs flows through," Mr Dale said.
"This situation will place further pressure on already very tight rental markets and reinforces the importance of the Federal Government's National Rental Affordability Scheme to increase the supply of new rental dwellings," Mr Dale said.
On a state by state basis, the total number of seasonally adjusted loans increased by 7.9 per cent in the Australian Capital Territory and was up by 4.5 per cent in Tasmania, 2.8 per cent in the Northern Territory, and 1.1 per cent in New South Wales.
The number of loans fell by 3.2 per cent in Western Australia, 2.7 per cent in Queensland, 0.8 per cent in South Australia, and 0.4 per cent in Victoria.
