Home Loans Rise Hints At Recovery

Canberra.

Victoria's housing industry is poised for a revival after news yesterday that home lending rose sharply early this year to its highest monthly level in more than 18 months.

Nationally, hopes that the worst of the housing slump could soon be over were also lifted, with the number of home loans rising consistently during the early months of the year.

According to the Bureau of Statistics, the number of loan approvals for owner-occupied housing in Victoria rose by 12.

6 per cent in February after adjusting for seasonal factors.

It was the third successive monthly increase and the first time since July 1994 that the number of monthly loan approvals (10,424) topped 10,000. It also reinforced an underlying improvement in the state's home-lending activity, first evident last June.

Australia-wide, the number of home loans during February rose by 2.9 per cent after adjusting for seasonal factors, with an 8.5 per cent surge in January. Total approvals (40, 634) were above 40,000 for the first time since September 1994. An encouraging feature was the 5 per cent jump in the number of loans for building new dwellings (to 5624), while 33,167 loans were approved for the purchase of established dwellings (up 2.8 per cent).

The new types of lenders continued to dominate the market accounting for virtually all of the increase during February.

Groups like Aussie Home Loans approved 4641 home loans, or 11.4 per cent of all home loan approvals. Master Builders Australia said the February result was consistent with anecdotal evidence that the housing decline was almost over, with a possible revival beginning between June and September.

The Housing Industry Association predicted an even earlier revival in housing commencements, forecasting signs of improvement during the next three months in response to the recovery in new home lending.

The president of the Real Estate Institute of Australia, Mr Phillip Bushby, said the figures showed a favorable movement.

``However, the pattern over time and across the states continues to be unstable, making it too early to predict future directions with certainty," Mr Bushby said.

     HOUSING: RECOVERY LOOMING?
     .                     Number of home loans
     .                Victoria                Australia
     .           seas. adj.  trend         seas. adj.  trend
     1995 Jan      7883      8398             35,564   36,148
     .    Feb      8360      8076             35,077   34,879
     .    Mar      8109      7772             34,047   34,068
     .    April    7471      7566             32,474   33,877
     .    May      6602      7524             33,450   34,306
     .    June     7823      7648             35,970   35,239
     .    July     8145      7884             37,593   36,305
     .    Aug      8447      8130             37,135   37,160
     .    Sept     8321      8380             36,879   37,709
     .    Oct      8741      8601             39,165   37,996
     .    Nov      8358      8828             38,710   38,250
     .    Dec      9137      9114             36,386   38,611
     1996 Jan      9253      9430             39,482   39,024
     .    Feb     10424      9733             40,634   39,483
     Source: Australian Bureau of Statistics