The Australian Bureau of Statistics (ABS) has released Housing Finance figures for March 2014. The number of commitments for owner occupied dwellings reveal growth has taken a slower pace despite differing predictions from economists. We take a look at the ABS Statistics and what they might mean for the Australian housing market, as well as approvals.

By Graham Doessel, Non-Legal Director, MyCRA Lawyers www.mycralawyers.com.au.

The number of home loans approved in March fell 0.9 per cent, weaker than economists’ expectations of a 0.5 per cent rise.

Australian capital city house prices continued to rise in the March quarter, by 1.7 per cent, softer than the 2.9 per cent rise economists were expecting.

 “We saw very, very solid growth in Sydney and Melbourne, and most other major property markets, and what we’re seeing now is a pull back,” JP Morgan economist Tom Kennedy said in the West Australian today.

 “Over the past few months, there’s been quite a slowdown and deceleration from the euphoria that we saw in the second half of last year.”

But that growth had been unsustainable, Mr Kennedy said, and “prices are now growing at levels that are perhaps more sustainable over the long term”.

Here’s the ABS data for Housing Finance March 2014:

MARCH KEY POINTS

VALUE OF DWELLING COMMITMENTS

March 2014 compared with February 2014:

The trend estimate for the total value of dwelling finance commitments excluding alterations and additions rose 0.2%. Investment housing commitments rose 0.4% and owner occupied housing commitments rose 0.1%.

In seasonally adjusted terms, the total value of dwelling finance commitments excluding alterations and additions fell 1.1%.

NUMBER OF DWELLING COMMITMENTS

March 2014 compared with February 2014:

In trend terms, the number of commitments for owner occupied housing finance fell 0.1%.

In trend terms, the number of commitments for the purchase of new dwellings fell 1.4% and the number of commitments for the purchase of established dwellings fell 0.3% while the number of commitments for the construction of dwellings rose 1.7%.

In original terms, the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments rose to 12.6% in March 2014 from 12.5% in February 2014.

The housing market and bad credit

What happens to people who have bad credit? When they are refused a mainstream loan because of bad credit, but market confidence is high – when it is moving up – they may not think twice about choosing a high interest rate loan in order to take advantage of an increasing market. This comes at a price though – a whopping $15,046.57 or more in additional home loan repayments over the first three years of their loan. But if the market is going up rapidly – a potential buyer may see it as a viable option.

When confidence is low, or when the market is fairly static, they may not be so keen – they may simply choose not to buy rather than pay the extra in interest.

Many of the people that currently have negative listings on their credit file may be living with bad credit history unnecessarily. Rather than miss the opportunity to buy because there is no urgency to buy, because they would rather save that $15,000 – there is another option – to actually assess whether they would be suitable to have their credit listings disputed and ‘repaired’.

To find out how more people can remove their bad credit history – opening doors to lenders that were previously unavailable – contact MyCRA Lawyers on 1300 667 218.

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