Mortgage lending coasting as property prices are yet to boom

Owner occupier home lending hit $14.52bn in March Investor finance dropped 5% to $6.29bn Property prices aren't booming yet.

The housing sector is showing early signs of recovery with four consecutive months of housing approval loan growth but analysts say it is not the start of another property boom.
But investors remain reluctant to spend because the stock market is offering superior returns.
Economists said a combination of stable interest rates, easing inflation pressures and jobs growth will stimulate a surge in house prices nationally over the next 12-18 months.
Yesterday, Australian Bureau of Statistics data showed that borrowing for owner-occupied housing, driven by the influx of new migrant workers, was up 1.7 per cent to a record $14.52 billion in March.
Investors stick to sharesInvestor concerns, later proven to be unfounded, that the Reserve Bank of Australia would lift interest rates in March or April resulted in investment loans dropping 5 per cent to $6.29 billion.
CommSec equities economist Martin Arnold said the reluctance of investors to cash out of the booming share market, which has delivered returns of almost 12 per cent since the start of the year, was delaying the expected upswing in the property market.
In the 12 months to March, national house prices were up 8.6 per cent on average as the boom in Perth prices had been offset by the lacklustre Sydney market.
"The share market is likely to start trading sideways over the next few months and we then expect a pick up in the investor segment of the property market,'' he said.
"It is likely to be more of a gradual improvement in the housing sector rather than a massive turnaround. The strength of the jobs market is one of the only reasons there is any growth in the property market.''
Dollar liftedby dataThe Australian dollar lifted on the release of the ABS data and closed at US83.34 as some financial market participants bet on a interest rate rise later this year.
But most economists are forecasting the RBA will leave rates on hold at 6.25 per cent until early 2008 after Governor Glenn Stevens earlier this month said annual inflation levels were likely to fall to below 2 per cent over the next couple of quarters.
Westpac senior economist Andrew Hanlan said that the three rate rises in 2006 have lost their sting. Source: Herald Sun