The latest Australian Bureau of Statistics housing finance figures suggest that the Australian property market may be recovering thanks to investors.
While figures in real terms show a decrease of 0.7% in the value of finance commitments and a 1.2% drop in the number of commitments, seasonally-adjusted figures show an increase of 0.7% and 1.9% respectively. That seasonally-adjusted growth is being driven by investors, with an increase of 2.6% in value: indeed, investment finance was the only category to increase in real terms, by $77m.
The number of first time buyers taking out mortgages fell again, to only 16% of the market.
Even so, some commentators were pessimistic about the figures, with Real Estate Institute of Australia president David Airey pointing out that, while property investment is rising, it is at a slower rate than in previous months. Meanwhile, the Housing Industry Association's chief executive, Graham Wolfe, pointed to a slowdown in 'trade-up' buyers.
"Interest rate speculation that was evident in the early part of the year has clearly downgraded the confidence of trade-up buyers," he commented. "If there is any hope of a substantial return of trade-up buyers to the market, interest rate increases need to be avoided for the remainder of 2010."
Even so, economists seemed relatively pleased with the figures, with UBS's chief economist Scott Haslem pointing out that 'the sharp down cycle after the end of the first home owner incentives appears to have ended."
The ABS figures also revealed that purchases of new homes increased by 1% in real terms in May, while purchases of existing properties fell by 1%.
