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Housing finance remains flat



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11 June 1996

M E D A R E L E A S E

MASTER BUILDERS ) A U S T R A L I A ยท '

3 r d F l o o r

C o n s t r u c t i o n H o u s e

2 1 7 N o r t h b o u r n e A v e .

T u r n e r , C a n b e r r a

(HOUSING finance remains flat ACT 2601 Telephone: (06) 249 1433 Facsimile: (06) 249 1373

A Statement by Wilhelm Harnisch, National Director Economics & Housing

The marginal increase o f 0.4 per cent (seasonally adjusted) in April in the total number o f dwellings financed is consistent with an industry continuing to bounce along the bottom. The weakness o f the increase is disappointing. Both housing finance and building approval figures need to show more robust increases over the next two months if the projected turnaround in industry conditions is to be realised in the second half o f this year.

While welcome, the increase o f 1.3 per cent in the number o f loans for the construction o f dwellings is not sufficient to increase the level of activity in the new housing market. The increase is too small for many small house builders and their suppliers to provide them with enough work to ride out the current downturn. Unfortunately, the projected turnaround for these group o f builders and suppliers is likely to come too late for them and their employees.

However, on a positive note, the current fierce competition between banks, and between banks and non-bank mortgage lenders, should benefit the new housing market by making home ownership more affordable. It should also assist in restoring some of the loss in home buyers confidence caused by interest rate uncertainty by providing a buffer against any, but unlikely, upward movement in official interest rates.

The total number o f loans for owner-occupied housing (seasonally adjusted) increased by 0.4 per cent in April to 38,032 and were 17.1 per cent higher than April 1995. For the three months to April the total number o f loans increased by 1.9 per cent and were 14.6 per cent higher than the same period last year.

Loans for the construction o f dwellings increased by 1.3 per cent to 5,315 and were 1.9 per cent higher than April 1995. For the three months to April the number o f loans increased by 1.3 per cent but were 5.6 per cent lower than the same period last year.

Loans for the purchase o f established dwellings increased by 0.3 per cent to 30,896 and were 20.4 per cent higher than April 1995. For the three months to April the number o f loans increased by 2.0 per cent and were 18.9 per cent higher than the same period last year.

For further information contact: .

Wilhelm Harnisch BH: (06) 249 1433 AH: (06)288 9650

Master Builders Australia Incorporated A.R.B N 008 383 453

Incorporated in South Australia with limited liability