Further Interest Rate Cuts Justified

Posted on February 13th, 2013 · Posted in News

Real Estate Institute of Australia (REIA) President, Mr Peter Bushby says the housing figures released this week by the Australian Bureau of Statistics (ABS) show there’s only been a modest response to the interest rate cuts of 2012.

Housing finance figures for December 2012 show, in trend terms, that the number of finance commitments decreased by 0.1%, following modest increases late last year.  If refinancing is excluded, the December figures are flat following a rise of 0.2% in November.

“In trend terms, decreases were recorded in New South Wales, South Australia, Tasmania and the Northern Territory, with the largest decrease in New South Wales, down 1.1%, in trend terms. Increases of 0.2% and 0.3% respectively were recorded in Victoria and Queensland,” said Mr Bushby.

“The number of first home buyers, as a percentage of total owner occupied housing commitments, decreased to 14.9% in December 2012. This is the lowest since 2004 and compares to the long-run average proportion is 20.2%.” “This is of particular concern as some states have reduced their assistance to first home buyers who wish to purchase established dwellings.”

“These housing finance data figures indicate that a further reduction in interest rates is justified. With inflation within the RBA’s target zone, I hope the Reserve Bank Board members act in the interest of home owners when they meet in March,” Mr Bushby concluded.