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Housing figures show no response to rate cuts: REIA

By Staff Reporter
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Housing figures released by the ABS show there’s been no response to the interest rate cuts of May and June, according to Real Estate Institute of Australia (REIA) President Pamela Bennett.

“Housing finance figures for July 2012 show, in trend terms, that the number of finance commitments has remained flat after six consecutive months of decreases,” Ms Bennett said.

“In trend terms, increases were recorded in Victoria, Tasmania and the Northern Territory, however all other states and territories recorded decreases,” she said.

The largest decrease was in Queensland (down 1.0 per cent in trend terms) while the largest increase was in Tasmania (up 1.9 per cent in trend terms).

“Increases were evident for the construction of new dwellings and the number of commitments for the purchase of new dwellings,” she said. “The commitments for the purchase of established dwellings fell by 0.2 per cent.”

The number of first home buyers, as a percentage of total owner occupied housing commitments, increased to 19.2 per cent in July 2012 compared to 18.5 per cent in June 2012. The long-run average proportion is 20.2 per cent.

The value of investment housing commitments was also flat, in trend terms, in July after four consecutive months of declines.

“These housing finance data figures indicate the RBA should have reduced interest rates again in September as the market has not responded to the two previous cuts. With inflation within the RBA’s target zone and a more subdued international outlook, the message for next month’s RBA meeting is abundantly clear,” Ms Bennett said.

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