Housing investments take a dive
Wednesday, October 10, 2007/
Finance for investor’s home purchases dipped 4.5% in August, a significant drop that meant that the total amount of new housing loans fell 0.3%.
While the value of owner occupied housing finance increased by 1.7%, investment housing commitments decreased by 4.5%, a reversal of previous trends.
International financial wobbles, an interest rate rise in early August and a rush by investors to put $1 million into super before the July cut-off are all possible contributors to the fall.
Consumer sentiment also appears to have declined, with the Westpac-Melbourne Institute consumer sentiment index, falling 0.3% in October, although it remains 15 points above the 100 point line separating positive from negative sentiment.
However, the index remains 9.6% above its level this time last year, and could possibly move higher if stable market conditions continue.
According to Westpac economist Bill Evans, the impending election, rising petrol prices and continuing uncertainty following the August credit crunch explains the consumer uncertainty.
On the markets, the S&P/ASX 200 is again performing strongly today, by 12.15 am lifting 0.6% on yesterday’s close to 6718.9 to be on track for yet another record level at close. The Australian dollar is trading at US89.94c, up on yesterday’s US89.45c close.