Big jump in home loans

By Rachel Hancock

South Australia has recorded one of the nation's biggest jumps in new home-loan approvals.

Figures issued by the Australian Bureau of Statistics show only the Northern Territory bettered SA's 14.9 per cent increase in the number of new home loans approved in May.

Industry experts say leading the surge is the doubling of the first home owners' grant to $14,000 and cuts in interest rates.

Housing Industry Association state executive director Brenton Gardner said both factors were rapidly pulling the industry out of the post-GST doldrums.

"The first home owners' grant is clearly the tonic that builders needed to avert job losses, as this month has seen another strong rise in first-home numbers by 11 per cent over the month," Mr Gardner said.

"At the same time, other industry groups were talking of the HIH collapse bringing the home-building industry to its knees.

"HIA has to ask the question, what was the purpose of talking the industry down when there was a real need for confidence to be restored after the deepest home-building downturn on record."

Nationally, home-loan approvals rose by 21.2 per cent, with more than 5500 new loans - the highest recorded in 14 months.

Tasmania registered the lowest rise, at just 1.9 per cent.

Rossdale Homes managing director Craig Robinson said he was not surprised by our state's strong response to favourable housing market conditions.

"Part of that is attributable to the $14,000 home grant, which is now much more significant in its contribution and that has probably influenced people jumping into the market," Mr Robinson said.

"People have got an interest back into bricks and mortar because the share market has been a bit bumpy in the past six months.
"People are realising there's a bit more safety in bricks and mortar."

Mr Robinson believed the first-homebuyers' market had reached its peak, which would mean an interesting next six months.

Reproduced from The (Adelaide) Advertiser, 15 July 2001.