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Property lending increasing across most of Australia, latest figures show

The latest figures from the Australian Bureau of Statistics shows that lending increased across nearly all categories with loans for construction and purchase of new homes up over 10% compared with the previous month.

There was also an increase in lending for the purchase of existing homes, up 5.9% in value terms in March compared with February and up 6.2% in the first quarter of the year.

The total number of seasonally adjusted loans to owner occupiers increased by 8% in New South Wales, by 5.3% in South Australia and in Victoria, by 4.3% in Tasmania, by 4% in Western Australia, by 3.5% in the Australian Capital Territory and by 1.8% in Queensland. The number of loans fell by 1.7% in the Northern Territory.

‘The latest housing lending figures point to a strengthening of this measure of market activity. Lending increased across nearly all categories, with the loans for construction and purchase of new dwelling up over 10% in the month. On an annual basis, this represents an increase of over 20%, a very welcome lift in activity,’ said HIA senior economist, Shane Garrett.

‘The expansion in lending activity in March is in line with our expectation that the market will gradually strengthen. It suggests that interest rate reductions maybe providing support to weak markets and we look forward to the latest RBA rate reduction leading to further positive news in the market,’ he explained.

He pointed out that in terms of owner occupiers, the aggregate number of loans for the construction and purchase of new homes increased by 10.1% in the month of March 2013, while loans for established homes net of refinancing was up by 6.2%.
 
‘Looking at lending to investors, finance for established dwellings has been rising fairly consistently with the value of loans increasing by 6.2% over the three months to March 2013, for example,’ explained Garrett.

‘However, investor lending into new dwellings fell sharply by 16.4% in the March 2013 quarter, although the overall profile appears to have followed a path of improvement since the middle of 2012,’ he added.

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