Finance for construction of dwellings rose marginally but loans to purchase new homes fell by 6.9 per cent. Photo: Glenn Hunt
The number of home loans approved in July has fallen by 1 per cent to 44,804, suggesting the slowdown in the housing sector is far from over.
Bureau of Statistics figures released yesterday show the total value of housing finance fell 1.8 per cent during the same month, seasonally adjusted, to $20.050 billion.
Finance for construction of new dwellings rose marginally but loans to purchase new homes fell by a more substantial amount, 6.8 per cent, the ABS figures show.
Economists had expected housing finance to be flat in July, NAB group chief economist Alan Oster said.
‘‘It’s consistent with the idea that says the housing market’s going sideways,’’ Mr Oster said. ‘‘It’s certainly not showing any signs of strength.’’
Investors were also wary of purchasing. Loans for investment fell 2.7 per cent in July.
‘‘Building and purchasing of new housing is an area of weakness at the moment,’’ Mr Oster said.
The weakness in the loan market follows recent news that sales of new home fell in July to their second-lowest level in 11 years.
The Housing Industry Association new home sales report showed the number of homes sold fell 5.6 per cent to 5682 homes. That followed a rise the previous month of 2.8 per cent.
Other factors suggest there may be some resilience in housing in the months following July.
Auction clearance rates - the proportion of homes sold under the hammer - in both of Australia’s largest residential markets, Sydney and Melbourne, remain above 60 per cent, several percentage points higher than the same time last year.
Online residential property listings have also risen. They were up by 1.5 per cent in August, to a total of 373,510, according to SQM Research.
That will provide more choice for home hunters but may also dampen the market if it proves too much excess stock for Spring buyers.