The run up in house prices looks to have ended and with the demand for housing finance seems also to have peaked – ABS data for May which showed a fall of 0.8% in the number of new loans and a fall of 0.7% in the value of loans.
The market was already looking for a fall of 0.5% fall and earlier this week Westpac said that there were clear signs of a “cooling” in the market after the increased demand in 2013.
Investment housing has been the big driver of housing finance over the past 12 months and the ABS said the value of investment housing commitments fell 0.9% in May.
The ABS also said it is investigating how strong its first home buyer loan data is after concerns were raised that “under-reporting” could be occurring if some lenders were only accurately reporting buyers who were receiving a first home owner grant – something not every first-time buyer is eligible for.
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