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Housing finance increase not enough to warrant interest rate rise
The latest Housing Finance data released by Australian Bureau of Statistics shows the number of home loans seasonally adjusted rose 1.1% in June 2009 to 65,151.
“There is no doubt that these figures are good news,” said REINSW President Steve Martin.
“What concerns me is that the June increase of 1.1% will be used by the Reserve Bank as the green light for an increase in official interest rates.
“The last thing we need to be doing is pulling the rug out from under a fragile recovery in the property sector.
“Importantly, the June results are not only at the lower end of market forecasts but are half the increase recorded in May 2009 (2.2%).
“Of even greater significance is the fact that the number of first home buyer commitments actually fell from 28.5% in May to 27.1% in June; this at a time when the incentives for first home buyers have never been greater including the lowest interest rates in 40 years.
“Recovery in the housing sector is essential for a sustained recovery to take place in the broader economy.
“Today’s results are not the green light for an increase in official interest rates but rather another small step on the long road to recovery,” said Mr Martin.
Please direct media inquiries to Julian Brophy on 0408 276 749.
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