Mixed signals have emerged from the latest housing finance figures with loans for the purchase of established dwellings up in December but loans for new housing down.
According to data released by the Australian Bureau of Statistics (ABS) yesterday the total value of housing loans written in December inched upwards 2.5 per cent to $21.587 billion, seasonally adjusted.
The number of loans for the purchase of established dwellings rose three per cent while the number of loans written for new homes plunged 10.1 per cent.
The tenuous recovery in the housing market would be dependent on an extended pause in interest rate policy, according to Master Builders Australia.
Peter Jones, chief economist of Master Builders said, "The housing market has stopped going backwards but despite recent signs of improvement, continues to struggle against the impact of recent interest rate hikes."
"Finance commitments in December confirm that the decline suffered in 2009-10 has been arrested, but that the pace of recovery will be slow."
"Still suffering from the credit squeeze and bank lending practices, the interest rate sensitive residential building industry needs an extended pause in Reserve Bank monetary policy."