In March, Australia’s housing finance rose a bit, continuing with its prior month’s rise. The investor segment drove the positive result for March. The macroprudential regulation’s impact seems to have faded. The country had introduced the regulation in 2015 that tightened borrowing conditions and raised interest rates for investors. The rebound in housing finance is in line with other indicators that imply that Australia’s housing market is strong, said ANZ in a research note.
Auction clearance rates continue to be stable at decent levels, while prices of house are climbing, particularly in the important markets of Melbourne and Sydney. The strength in process in finance approvals for buying new dwellings or construction of new dwellings also provides an optimistic sign. Moreover, the Australian central bank’s recent rate reduction and the likelihood of RBA lowering rate further in August are expected to give additional support to the Australian market outlook, noted ANZ.
But housing finance commitments continue to be below that of 2015 in contrast to the double digit growth seen in recent years. The Australian housing market is expected to ease through 2016, but the above mentioned optimistic indicators show certain risks on the upside to this view, added ANZ.
