This year the Australian property market is experiencing strong growth as mortgage loans have increased for six straight months now.
According to the Australian Bureau of Statistics, November saw a 2.5 percent increase in home loans and December reported a 2.1 percent increase. Most analysts predicted that a 1 percent increase would occur due to the fact that the Reserve Bank lifted the cash rate in November to 4.75 percent, but the percent actually more than doubled.
RBC Capital markets economist Michael Turner states the Australian property market is much more resilient than most had anticipated, as the growth of mortgage loans continues to increase. Turner also points out that December’s increase was largely due to refinancing, as refinancing loans in value and number jumped a “seasonally adjusted 6.2 percent.”
Australia also saw an increase for construction loans last year and according to Fairfax-owned APM, Sydney’s action clearance rate increased to almost 70 percent this past weekend, which is up 46.6 percent from the previous weekend.
According to property analysis group SQM Research, the number of annual listings is on the increase as well, as listings of property increased 40.6 percent in January to 326,194, year on year. Glenn Stevens, RBA governor, believes that the rates are slightly above average when compared to the past 15 years. The increased rates have caused analysts to lower their expectations for 2011’s property market as affordability is simply less for many people.
Investment loans have increased as well, rising 3 percent in December according to ABS, and owner occupied-housing increased 2.3 percent in December. New South Wales and Tasmania saw the highest increase at 4.8 percent.