The number of new home loan approvals reached 48,475 in April, scoring their highest number in three and a half years, the Australian Bureau of Statistics (ABS) said this week.
Month-on-month, the number of new home loans approved edged up 0.8%, failing to meet market projections for a more material increase of 2%. The figure implies that Australians are still wary of drawing new debt and prefer to cover existing liabilities instead, Sky News reports. Compared with April 2012, home loan approvals climbed by 1.4%.
In value terms, housing finance slipped 0.2% in the fourth month of the year, while the value of loans for investment housing gained 1.1%.
Despite the improvement, the figures are still “a bit weak,” Michael Workman, senior economist at Commonwealth Bank, commented. Overall, the data suggests a very modest uptick in loans both in terms of number and value, which is in tandem with the current consumer sentiment figures. This implies that confidence is still fragile, he said. Generally, Australians believe the time is right for buying a new home, but are still nervous about committing themselves to borrowing and want to first pay off any existing debt. According to Workman, the growth in the number of new home buyers is fairly modest partly due to the exhaustion of most assistance programmes implemented by the government.
Growth like this is, however, encouraging and a step in the right direction for the property market. It indicates that, slowly but surely, confidence is growing.