Housing Finance Continues to Improve

According to Australian Bureau of Statistics (ABS), “housing finance figures for October 2011 show in trend terms that following half a year of consecutive decreases, the number of finance commitments increased marginally for the sixth consecutive month; the October increase was 0.7%.” The housing commitments increase to 17.9% in October compared to 16.4% in September, as a percentage of the number of first home buyers. First home buyers contributed an increase of 23% in Victoria and 17% in New South Wales and Queensland. It shows that house prices will weakened and investor housing finance was unchanged.

According to David Cannington at ANZ Research, "While both the investor and upgrader segments are on a softening trend, first home buyers are showing a fledgling recovery. Weakening house prices and lower mortgage rates (with the November and December rate cuts still to provide a positive impact to housing finance) have improved housing affordability to a point that is encouraging first home buyer activity.” In trend terms, the value of the investment housing commitments was flat and the figures shows that first home buyers are returning to the market. Many people expect that there will be continues increase in housing finance.