First home owners drive home loans
First home buyers are emerging as a stronger force in the home loan market, the August 2004 home finance data from the Australian Bureau of Statistics shows. The ABS reported that the value of housing finance, seasonally adjusted, fell by 0.7 per cent in August to $15.5 billion. The fall follows a rise of 3.5 per cent in July and a fall of 3.5 per cent in June. First home buyers accounted for 16 per cent of all owner-occupier loans, the highest level since November 2002. However, home borrowing continues at a level the Reserve Bank considers unsustainable, putting upward pressure on interest rates. Commonwealth Bank chief economist, Michael Blythe, said the strength of home borrowing added to the case for higher interest rates. National Australia Bank economist Alan Oster has forecast a rate increase before Christmas.