Housing industry calls for further rate cuts this year

HOUSING Finance data released today by the ABS shows that new home lending slipped back during August, said the HIA.

The number of loans given for purchasing and constructing new homes shrank slightly in August.

HIA Senior Economist Shane Garrett said that this was a timely warning against complacency towards Australia's housing market.

"Compared with twelve months ago, new home lending activity has increased markedly," Mr Garrett said.

"However, growth has completely stalled over the past six months even though activity was already rather low by historical standards.

"The patchiness we are continuing to see in areas of the home loans market means that another interest rate cut from the RBA before the end of 2013 is important in order to ensure that the market recovery fires on all cylinders.

"Current policy settings have proven to be insufficient to drive a sustained recovery in new home lending and a renewed focus on housing policy reforms is needed to copper fasten the recovery."

In the three months to August, the number of loans to owner occupiers for the construction and purchase of new homes rose by 0.3 per cent and was 13.3 per cent higher than the same period in 2012.

This included a 0.2 per cent increase in the number of loans for the construction of a new dwelling during the three months to August, with lending in this segment up 3.6 per cent compared with the same period of 2012.

The number of loans for the purchase of new homes was 0.6 per cent higher in the three months to August.

In August 2013, the seasonally adjusted number of housing finance commitments (for both new and established owner-occupied housing) increased in NSW (+2.3 per cent), Victoria (+2.2 per cent) and Tasmania (+0.1 per cent).

Lending declined by 3.2 per cent in Queensland, 8.6 per cent in South Australia and 1.3 per cent in Western Australia over the same period.

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