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Further growth for owner-occupier lending

ByJamil Allouche

The value of new home loans has continued to rise, suggesting that it's possible to get hold of finance to buy Fitzroy North property. Data from the Australian Bureau of Statistics (ABS) has been analysed by the Housing Industry Association (HIA), which believes there is some room for optimism.

Over the course of April, there was a 4.4 per cent rise in the number of loans granted for owner occupier housing construction. Meanwhile, the amount of mortgages granted for buying a new home increased 3.3 per cent.

There was a slight rise in the proportion of first-time buyers entering the market. They accounted for 14.4 per cent of total lending, up from 14.2 per cent a month earlier.

Buyers ride on the back of cash rate cut

The HIA believes that new home buyers are still reaping the rewards of the cut to the official cash rate back in May. This has led to increased confidence and willingness to enter the property market, plus there's the fact that home loan rates are more favourable than ever.

"Even though the amount of new home lending for owner occupiers peaked over a year ago, current loan volumes remain elevated by historic standards," said HIA senior economist Shane Garrett.

"This means that activity on the ground over the remainder of 2016 will be healthy."

The Reserve Bank of Australia has since made its June cash rate decision, when it decided to keep the cash rate low for another month. This means that favourable conditions will continue for a while longer at least, potentially bringing a further boost to confidence levels.

If you have your sights set on Fitzroy North property, make sure you give the team at Ray White Brunswick a call. We're here to point you in the right direction and help you make an investment you're entirely happy with.

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