Fed: Builders says lending figures show no rate rises needed
CANBERRA, Dec 10 AAP - Figures showing falling home lending should ease fears the housingsector was overheating and keep interest rates on hold longer, the building sector saidtoday.
Allowing for seasonal influences, loans were granted for 50,703 home purchases in October,down 1,531 or 2.9 per cent on the previous month, the Australian Bureau of Statistics(ABS) said.
Loans to build new homes slumped by 8.7 per cent to 5,115 - the lowest figure sinceMarch 2001 - while lending to buy new homes fell 4.8 per cent to a two-year low of 1,267,the ABS said.
Master Builders Australia (MBA) said the slowdown showed the Reserve Bank of Australia(RBA) was right not to lift interest rates from their historically low levels.
"The housing market should be allowed to adjust naturally without the need for interventionby the Reserve Bank," MBA chief executive Wilhelm Harnisch said.
Today's figures showed housing activity would slow in the first quarter of 2003, he said.
Mr Harnisch said the downward trend in housing finance is expected to continue andwas consistent with a market where pent-up demand has been satisfied.
The Housing Industry Association (HIA) said the slowdown in loans to owner occupierspointed to a soft landing for home builders into the second quarter of 2003.
"For the investor market, however, the recent surge of approvals is of concern butmust be viewed in context as many projects have long completion times and some will failto (commence)," HIA executive director Ruth Morschel said.
"The barrage of negative comments on the investor market is a risk to overall confidenceand could unnecessarily accelerate the slowdown in the lower density owner occupied market- a market that contributes more to jobs and GDP," she said.
AAP jph/kjp/ldj/sb
KEYWORD: HOUSING INDUSTRY
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