There has been a drop to a nine year low in Australia’s home loan commitments during June 2010.
While Home Loan commitments for owner-occupiers fell 3.9 per cent in June, almost twice the market forecast of 2 per cent, the total value of housing finance fell by 1.9% seasonally adjusted, to $20.710 billion.
Our housing market is finally beginning to show some cracks under the weight of ongoing price increases and interest rate boosts.
We are not seeing as many investors in the market with people choosing the ‘wait and see’ approach instead.
Mr James said the poor construction finance figures would signal concerns about a lack of demand for projects in the second half of the year.
The ABS said finance for construction projects also dropped 5% during June 2010. There is indication of overall deterioration in the property market and especially the residential housing sector.
We will no longer be able to rely on the housing sector to prop up the Australian economy. Undoubtedly this was one of the factors which led to RBA leaving rates on hold last week.