HIA expects effects of rates cuts to emerge in coming months

THERE were mixed results in new home loan approvals in January, with a 1% fall in Queensland and a 1.6% rise in New South Wales.

THERE were mixed results in new home loan approvals in January, with a 1% fall in Queensland and a 1.6% rise in New South Wales.

In the latest housing finance figures released on Wednesday, the Australian Bureau of Statistics found new home lending rose just 0.6% nationally in the first month of 2013.

While the subdued result did not reflect interest rate cuts late last year, the Housing Industry Association expects things to pick up.

HIA economist Geordan Murray said he expected the effects of those cuts to emerge in the coming months.

"While we didn't see a material improvement in number of loans for new homes in January 2013, activity over the month was still 9.3% higher than we saw in January 2012," he said.

"From this perspective, we have started the year in a better position than we did in 2012."

Overall, the total value of new lending for housing rose 2.4% in January after two consecutive months of falls in November and December.

Mr Murray said that improvement was mainly driven by improved lending activity for established homes.

Lending owner-occupiers for new homes fell 1.1% nationally while lending for established home rose by 2.3% in January.

For the three months to January the seasonally-adjusted number of loans for the construction and purchase of new homes by owner occupiers rose by 1.6% in New South Wales, 8.4% in South Australia, and 5.3% in Western Australia.

The number of loans fell by 12% in Victoria, 1% in Queensland, and 14.6% in Tasmania.

Originally published as HIA expects effects of rates cuts to emerge in coming months