End of 2012 real estate market wrap- what is next for 2013?

Housing finance data was released this week by the Australian Bureau of Statistics (ABS) for November 2012. The data showed that the number of owner occupier finance commitments fell by -0.5% over the month with refinance commitments rising by 1.1% however, this was off-set by the -1.3% fall in non-refinance commitments. Refinance commitments are 0.4% higher in November 2012 than they were in November 2011 and non-refinance commitments have also risen, up by 0.7%.

The total value of housing finance commitments fell by -0.8% in November 2012 with owner occupier finance commitments increasing by 0.6% and investment finance falling by -3.3%. Compared to November 2011, the total value of owner occupier finance commitments has risen by 3.0% and investment commitments are up 15.5%.

Looking at finance commitments for first home buyers, there was a large slump in November 2012, with commitments down -14.0% over the month and -20.6% lower than in November 2011. First home buyer finance commitments had been trending higher over recent months however, it appears that changes to incentives are likely to have led to the large fall in November. Over the month, first home buyer finance commitments accounted for 15.8% of all owner occupier commitments, its lowest proportion since July 2004 (15.4%).

Westpac and the Melbourne Institute released their January 2012 Consumer Sentiment Index results this week. The Consumer Sentiment Index rose by 0.6% over the month to reach 100.6 points which indicates that respondents are slightly more optimistic than pessimistic. The Index has now been at, or above 100.0 points for three successive months and this is the first time this has occurred since June 2011. According to the Index, consumers are likely to be more optimistic than pessimistic about their family finances over the next year and believe that it will be a good time to buy a major household item. Respondents remained pessimistic about their finances over the last year and the economy over the coming year and the next five years.

Source: RpData http://pages.e.rpdata.com/industry-wrap-170113/