Published on January 15th, 2013
HIA hopeful of gov’t initiatives to prop up real estate sector
New data has found that the number of loans issued for the construction of new real estate has declined, but experts are hoping government intervention will assist with a recovery.
An Australian Bureau of Statistics survey suggests that the three months to November 2012 saw a 14.1 per cent decline in the number of loans issued for the construction of new homes compared with the same time two years ago.
Robert Harding, regional executive director of the Housing Industry Association in South Australia, said there is still hope for the state's real estate industry.
He commented: "However, we should note that the increased government assistance targeted to new home building is still in its infancy, so we're still holding out to see these increases take effect across the indicators, including new home lending."
The data is showing that interest rates aren't having the immediate impact that experts were hoping for.
Mr Harding mentioned that lowering interest rates could assist in easing the difficult environment of the housing sector by reducing the high cost of real estate in areas like Darwin.
News Limited reports that experts are predicting more cuts in interest rates – possibly down as far as 2.25 per cent.
Chief economist with National Australia Bank Alan Oster predicted these cuts will combat a declining economy in many areas.
He mentioned there is a lack of confidence across the board, adding that small businesses will be struggling this year.
"With the economy continuing to weaken and unemployment set to rise noticeably through 2013, the RBA will need to cut significantly further than previously expected in 2013," he commented.
Chief economist with CommSec Craig James had a different perspective, saying that those who own commercial real estate will have a better year as retailers enjoy a nicer 2013.