Mortgage approvals continue to plunge around the country, falling to a nine year low in March. The 3.4% fall was the 6th consecutive monthly fall and is a good indicator of what to expect for house prices in the coming months.
The 26 percent decline from the peak in June 2009 follows an almost identical 28 percent decline in 2008 surrounding the GFC1. A low of 48,374 approvals were recorded in September 2008, one month before the government announced its BOOST to the first home buyers grant, effectively bringing forward demand from many first time buyers and preventing a market correction.
Approvals for March 2010 sit at 48,260. Three weeks ago, the government reversed its decision to streamline foreign investment laws which caused an influx of foreign buyers into the market. In what is a welcome relief, the government decided against interfering with the housing bubble last night with the 2010 Budget.
Its hard to see any price support for the Australian housing market in the months ahead.
» 5609.0 – Housing Finance, Australia, Mar 2010 – The ABS, 12th May 2010.