Further cuts are needed
Housing figures released by the Australian Bureau of Statistics show there has been a modest response to the interest rate cuts of May and June, Real Estate Institute of Australia president Pamela Bennett said. Housing finance figures for September show, in trend terms, the number of finance commitments has increased by a modest 0.5 per cent, following the 0.6 per cent increase in August. If refinancing is excluded, the increase in trend terms for September is 1.1 per cent, compared to the August increase of 1.4 per cent and is the smallest increase for the last four months. ‘‘In trend terms, increases were recorded in all states and territories except South Australia,’’ Ms Bennett said. ‘‘Increases were evident for the purchase of new dwellings (up 3 per cent) and the purchase of established dwellings up by 0.5 per cent. ‘‘The number of commitments to the construction of dwellings was down 0.3 per cent. ‘‘The number of first-home buyers, as a percentage of total owner occupied housing commitments, increased to 19.3 per cent in September compared to 18.6 per cent in August. ‘‘The long-run average proportion is 20.2 per cent.’’ The value of investment housing commitments rose by 1.1 per cent in trend terms, in September which is the first increase in six months. ‘‘These housing finance data figures indicate that the RBA should have reduced interest rates again in November as the market response to the two previous cuts has been modest,’’ she said.