Current Property News - Market Commentary

Construction of new homes in Perth rose for the third consecutive month in December according to a recent Housing Industry Association (HIA)-JELD-WEN New Home Sales Report. In a sluggish market, this consistent increase is cause for some optimism.

The report remarked that detached new house sales increased 4.2% in WA (while nationally there was just a 0.3% increase). The Australian Bureau of Statistics (ABS) also supports this positive outlook with figures showing that the number of owner-occupier loans in December rose by 0.9% and first home buyer loans were up by an astounding 22.2% for the December quarter.

Nationally housing finance in general is also on the up, surprising experts with another increase for the sixth consecutive month even despite the rate rise in November.Growth in owner-occupier home loans actually rose by more than double economists’ predictions, to a seasonally adjusted increase of 2.1% according to the ABS.

"The housing market certainly seems more resilient than most had anticipated given the move in mortgage rates in November," said RBC Capital markets economist Michael Turner.

Commonwealth bank economist James McIntyre believed strong jobs growth was helping households to manage the interest rate rise.

"Thus far the November rate hike appears to have had very limited impact on demand for mortgages, outside of a small dip in the construction-related lending," Mr McIntyre commented.

More people have also chosen to play it safe by opting with a fixed-rate home loan during December. 8.9% of loans approved in December carried a fixed rate of two years or more, the biggest proportion recorded since June 2008.