Lending for new housing has levelled out, according to Master Builders Australia.
Chief Executive of Master Builders Australia, Wilhelm Harnisch confirmed to propertyreview.com.au yesterday that the September Housing Finance figures indicate that the new housing market has plateaued, bringing into question the need for a further rate rise.
“The total number of dwellings financed in September 2003 rose by a seasonally adjusted 4.0% and were 19.1% higher than the same time last year,” Harnisch said.
• The number of loans for the construction of dwellings rose by 1.0% and were 1.3% higher than the same time last year.
• The number of loans for the purchase of new dwellings rose by 4.5% and were 21.2% higher than the same time last year.
“Housing is sensitive to interest rate movement, particularly at the peak of a cycle,” he says.
“The RBA should be very cautious in increasing interest rates further.”
“If last week’s rate rise was a pre-emptive shot across the bow of the property market, then it may take the heat out of those parts of the housing market currently at risk, but it may at the same time trigger an accelerated decline in other parts of the market, particularly first home buyers,” Harnisch warned.
“New housing has played a significant role in the economy over the last two years in creating jobs and household wealth and in stimulating other sectors of the economy, particularly manufacturing and retail.
“Anecdotal evidence suggest that demand for new housing has eased, which should allay any concern by the RBA that this part of housing market will move into dangerous oversupply.”
