Homebuyers sit on the market sidelines
MORE prospective homebuyers are holding off buying homes and flats in response to 12-year high interest rates and the hint of the first "buyers' market'' in many years.
Evidence of more picky homebuyers comes as a US demographer found Australian capital cities, including Melbourne, were among the world's most unaffordable.
Sydney topped the list as the world's most unaffordable city. But Adelaide, Perth and Brisbane also made it into the top 10, according to the Institute of Public Affairs, which blames poor planning and bad government policy for the problem.
Data yesterday showed the number of approvals for owner-occupied home loans slumped 3.7 per cent in June -- the fifth consecutive monthly fall in approvals.
It comes on top of figures that show housing has dipped, and forecasters are predicting declines in house prices over the next 12 months.
The number of home loans being written has fallen back to levels not seen since mid-2004 and around $6 billion less than the monthly amount 12 months ago.
Australian Bureau of Statistics figures yesterday revealed that 50,294 mortgages were issued in June. The fall was almost twice that predicted by analysts.
Economists fear the spate of bad figures emerging, including slower retail and car sales, may point to a hard landing for the Australian economy.
Financial markets are now convinced there will be a rate cut on September 2, when the Reserve Bank board meets, and a possible second cut the following month.
Tim Lawless, the national research director of property information service RP Data, questioned why Australia's property market was being portrayed as one of doom and gloom.
Mr Lawless said a population boom and a commitment to boost migration numbers by 30 per cent over the next year would strengthen demand