Australia | Dec 08 2006
By Chris Shaw
Australian housing finance figures for October fell 0.1% in a result broadly in line with market expectations, though as Westpac Bank notes the details within the headline figure were actually a little better than considered likely.
The bank notes ex-refinancing loans increased 0.3% when a slight fall had been expected, while the 0.5% increase in lending for new dwelling construction was also better than the forecast of a slight decline.
The ANZ Banking Group notes the figures, which equate to a 4.3% increase in housing finance for the past year, show underlying market conditions remain solid, a view shared by Westpac. The bank suggests the figures indicate there was an initial impact following the August rate increase but the market quickly stabilised, an outcome it expects to be repeated following November’s rate increase.
ANZ is forecasting a rebound in the housing sector next year, even as it sees the ongoing tightness in the sector as putting upward pressure on both rents and house prices, which will impact on affordability.
It expects the Reserve Bank of Australia (RBA) will be able to sit back and assess additional data for the next few months before being forced to act in terms of any change in official rates.