re: now housing back on the rise www.news.com.auHousing stages...

re: now housing back on the rise www.news.com.au

Housing stages comeback
From: AAP
July 11, 2006
ANOTHER interest rate rise might be closer after a surge in home loans in May, but an interest rate rise that month is expected to weigh on demand.

The Australian Bureau of Statistics said home loans rose 4.7 per cent in May to 62,768, despite the Reserve Bank of Australia that month lifting official interest rates to a five-year high.
There was a 5 per cent surge in the number of loans for purchase of established dwellings.

Loans for the purchase of new homes rose 5.6 per cent, while loans for the construction of houses was up 1.2 per cent.

The value of the loans was up 4.5 per cent overall. The value of loans for the construction of owner-occupier houses was up 4.5 per cent, while those for investment properties jumped 4.9 per cent.

Victoria led the way, with housing finance commitments there up 7.9 per cent. It was followed by South Australia (6.1 per cent), Queensland (4.4 per cent), the ACT (4.2 per cent), New South Wales (2 per cent) and Western Australia (0.8 per cent)

Commitments were down 5.2 per cent in the Northern Territory and 1.1 per cent in Tasmania.

Economists expect housing activity to cool in the second half of 2006 as the latest interest rate rise takes effect.
"Today's numbers are a solid outcome for the housing market, although they are unlikely to reflect much of the May interest rate rise, given lags in application processing," ANZ senior economist Ange Montalti said.

"The full initial effects of this rate rise should be come apparent in the June data release.

"We expect some softening in approvals over the second half of the year."