Home lending increases
New home lending is on the rise, according to the Australian Bureau of Statistics.
Dwelling commitment values increased 0.2 per cent in trend terms, quarter-on-quarter to March, and new dwelling construction increased by 1.7 per cent over the same period.
An increase in the value of dwelling commitments along with a lift in new dwelling construction could indicate that more Australians are trying to make the most of the existing cheap home loans available thanks to a historically-low cash rate.
In seasonally adjusted terms, the value of dwelling finance commitments actually dropped by 1.1 per cent (excluding additions and alterations), according to the ABS.
"Owner occupier lending was up by 3.6 per cent, while investor lending increased by 4.9 per cent," said Ms Diwa Hopkins, Housing Industry Association Economist.
"Today's data also show that capital city residential property prices increased by 1.7 per cent during the first quarter of 2014, to be 10.9 per cent higher than a year ago."
A lift in property prices in the nation's capital cities is certainly favourable for property owners in such areas, particularly if they're considering a mortgage refinance in order to upgrade to a better property.
Meanwhile, paying attention to areas that experienced this 1.7 per cent quarterly increase may be worthwhile for those looking to buy property that will continue to see strong capital growth in the future.
"Following a period of fairly strong increases late last year, prices appear to be growing within a more sustainable range," Ms Hopkins said.
"Combined with the current low interest rate environment, these developments provide favourable conditions for the residential construction sector."
However, Ms Hopkins also reiterated that a "catch-up" is required to address housing demand, which is a particularly pertinent issue in capital cities.
Image credit: Mark Moz