Good news for the housing market this week. It seems the recent interest rate cuts have prompted buyers to return to the market, with home loan approvals recording the highest rate this year, with an increase of 1.8 per cent in August.
By Graham Doessel, Founder and CEO of MyCRA Credit Rating Repairs and www.fixmybadcredit.com.au.
Housing Finance Data through from the Australian Bureau of Statistics yesterday shows the number of home loans approved rose to 45,821. That was from an upwardly revised 45,021 in July. Economists had expected housing finance commitments to rise 1.5 per cent in August.
AUGUST KEY POINTS
VALUE OF DWELLING COMMITMENTS
August 2012 compared with July 2012:
The trend estimate for the total value of dwelling finance commitments excluding alterations and additions rose 0.2%. Owner occupied housing commitments rose 0.6%, while investment housing commitments fell 0.5%.
In seasonally adjusted terms, the total value of dwelling finance commitments excluding alterations and additions rose 0.6%.
NUMBER OF DWELLING COMMITMENTS
August 2012 compared with July 2012:
In trend terms, the number of commitments for owner occupied housing finance rose 0.4%.
In trend terms, the number of commitments for the purchase of new dwellings rose 2.5%, the number of commitments for the construction of dwellings rose 0.9% and the number of commitments for the purchase of established dwellings rose 0.2%.
In original terms, the number of first home buyer commitments as a percentage of total owner occupied housing finance commitments fell to 18.6% in August 2012 from 19.2% in July 2012.
Here is an excerpt from The Australian’s story titled ‘Home loan approvals up 1.8pc in August amid rate cuts’:
St George economist Janu Chan said the result supported other recent housing sector data, suggesting that people were beginning to return to the market, particularly owner-occupiers.
“There is a definite upward trend in owner-occupier housing,” she said. “That’s certainly encouraging for the housing market, and is also in line with the stabilisation in house prices that we’ve seen in many states.
“There are however, some signs of weakness – investor housing is quite soft, suggesting that investors are still quite cautious about getting back into the market, despite the stabilising house prices.”
The value of investment-housing loans in August fell 0.8 per cent from July, the ABS said today.
Over the past five months, the Reserve Bank of Australia has shaved a full percentage point from the key interest rate. As a result, standard variable mortgage rates have on average come down by 55 basis points to 6.85 per cent.
But JPMorgan economist Tom Kennedy said that the market was yet to see a surge in new housing financing commitments fuelled by the rate cuts in May and June.
He said the two factors that are not encouraging people to get new home loans was uncertainty over the European economy and its debt crisis and that the commercial banks have not been passing on the RBA rate cuts in full.
Mr Kennedy said today’s figures are unlikely to affect the RBA’s interest rate outlook and he forecasts one more interest rate cut by the RBA before the end of the year.
“I think at this stage the RBA is focusing their attention on the labour market,” he said.
In the meantime, it will still be essential for borrowers to present with a clean credit file to ensure finance approval, particularly if lending criteria continues to be conservative. For those who are living with credit file errors and inconsistencies, there is a solution – to dispute that incorrect listing that haunts their ability to obtain credit.
Unfortunately consumers are often not aware across the board of their responsibility to check the accuracy of their own credit file so many errors go undetected until such time as they apply for a home loan.
At that stage, regardless of the accuracy of the information on their credit file, they are generally refused credit or forced to take on non-conforming loans at sky-high interest rates to secure the home.
But if a credit listing is unfair, contains errors or shouldn’t be there, then the consumer has the right to request a correction or removal.
When disputing any adverse listing, it is up to the credit file holder to provide reason as to why the creditor has not complied with legislation – as credit listings are not removed unless they have been unlawfully placed on the credit file.
Unfortunately many people find this process difficult at best – the mountains of legislation applicable in many cases can be daunting and many don’t have the skills or time to get to know it, and likewise, negotiating with creditors is not always easy for the individual to undertake.
The other option is to request help contesting a disputable listing with a credit repairer. Our job as credit repairers is to check the creditor’s process of listing defaults for legislative and or compliance errors, any such errors could deem the credit file default listing unlawful, at which time we advise the creditor to remove the default.
To find out more about how credit repair works, contact a Credit Repair Adviosr at MyCRA Credit Repairs on 1300 667 218 or visit the main website www.mycra.com.au.
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