Housing recovery happening, driven by unsung trade-up buyers: Terry Ryder

Amid all the negativity about real estate, much of it peddled by groups representing builders, not many people realise how much home lending has grown this year.

ABS data shows a 7% rise in the number of home loan commitments in the 12 months to the end of July 2012.

New South Wales, Western Australia and the Northern Territory have all had double-digit growth in loans to owner-occupiers in the past year.

Queensland, Victoria and South Australia have also experienced more activity by home buyers. There’s been little change in the ACT, leaving Tasmania, the basket case among the state and territory economies, as the only jurisdiction with a decline in home loans.

Loan commitments by investors have also risen, though by less. The value of loans to individual investors is up about 2% in the past 12 months. Queensland, the Northern Territory, NSW and Western Australia have had the most marked rises in investor activity.

The figures show that we generally have a recovery happening, but it’s not being inspired by investors, nor by first-home buyers. ABS data shows that only 19% of loans to home buyers are for first-time buyers.

The upturn in market activity is being led by that highly under-rated market sector, the one that no one talks about, the people who never get blamed for rising house prices but who are, undoubtedly, the reason our home prices tend to rise steadily. These are the trade-up buyers – i.e. home buyers other than first-home buyers.