25 November 2011
it is always difficult to try and guess which way a particular market may move. This applies to stock markets, the housing market, or any other free market.
Sometimes you may guess right, other times wrong – with this in mind, our MyRate review of recent home loan data below, should be seen as analysis only and not a concrete prediction of where the market is heading.
The Australian Bureau of Statistics (ABS) recently reported that the number of approvals for home loans in September was up, by about 2.2 per cent. This exceeded the broader market expectation by a little more than half a per cent. What does this mean? Good question! Maybe something, maybe nothing, but perhaps it will give a little confidence to the struggling housing market.
With the recent lull in home loan activity, this “above expectation” increase is seen as a positive indicator for the next few months. Furthermore, after the recent rate cut from the RBA, we would expect home loan activity to improve again over coming months – this in turn may bring buyers back into the market which will in turn support house prices.
It would be extremely surprising if house prices suddenly jumped up over coming months, but it would seem, at least, that the recent talk of rate cuts over the coming months is translating into increased consumer confidence. And we all know that consumer confidence – that feeling that everything’s going to be OK – is a vital component for any market recovery.
