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Market Wrap
04 Mar 10
Market Wrap

Housing finance data released by the Australian Bureau of Statistics this week detailed that finance commitments well and truly slowed during December 2009. For owner occupier housing loans, the number of commitments for first home buyers fell by -7.8% during the month whilst non first home buyer commitments fell by -1.8%. Perhaps more worrying was the fact that commitments for the construction of new dwellings fell for the second consecutive month, after falling by -7.1% in November 2009 they fell a further -6.4% in December. The fall in finance for construction of new housing comes at a time when the market desperately needs to see new supply additions. The lower levels of construction loans suggest housing supply shows no real sign of improvement. The trend of more investors in the residential market has continued over December with the value of investor housing finance commitments growing by 1.9%. Investor numbers have been trending upwards since August 2009, moving in the opposite direction of first home buyers.

Westpac and The Melbourne Institute released their Consumer Sentiment Index this week also and sentiment across their survey fell by -2.6% during February 2010. Although sentiment remains strong, this was the third time in four months the Index had recorded a fall. 

   


Auction markets are continuing to see activity levels grow with more than 600 auctions held last week, The weighted clearance rate across the combined markets was 59%, with the largest auction market (Melbourne) recording a much stronger result during the most recent week with a clearance rate of 74% compared to 39% the previous week. Clearance rates nationally and in most individual markets remain well below levels recorded during late 2009.
 
Source: RP Data, Feb 2010
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