The economic update released by ANZ economics and market research has stated that in June 2008 the housing finance commitments have reduced to a larger extent. The research confirms that the dwelling commitments have slumped by nearly 4% in the month of June and a total standing is at around 25% in the current year. In the month of June alone, dwelling investments fell to around 0.9%. It should also be noted that the vendor owned properties were down around one percent and the loans taken by investors have lessened around 0.3%. However, home financing for first time property buyers has gradually increased to nearly 17 ½%. Various factors like fuel prices, interest rates, rents and rises in grocery items have triggered the weakness in housing finance consignments, as family units were unable to cope with the economic trend. Ultimately the crisis has destabilized the housing sector leading to the downfall of real estate industry. Vendors and purchasers remain suspicious about the development, which has lead to plummeting demand for funds.

The demand for dwelling commitments has plunged by forty three percent for new homes and to twenty five percent for traditional houses. The approval rates have also dipped subsequently. It can be termed as the market protecting itself from a major downfall in rates as very few houses are put up for sale when prices are weak. The RBA has maintained a restraining strategy, as the economic conditions are very tense with high inflation menacing its way through. It is also predicted that the interest rates could take a downward move and remain stable till June 2009. Further cuts are anticipated if the inflation threat is completely dissolved. The month of July 2008 had experienced a smooth financial commitment with mortgage rates increasing. It is also expected that the slash in interest rates will stop the slimming down in the housing sector in the future months. As soon as the condition gets better the activity in the housing industry would definitely elevate.

In the month of June 2008 the owner used dwelling finance commitments dipped in all the major states in Australia. In New South Wales and Western Australia dwelling finance commitments decreased around 4 ½% in the negative. In Queensland it was around five percent down, in Victoria nearly four percent down. Whereas, in South Australia and the Australian Capital Territory it was around 3 ½ % behind. Tasmania stands at 5.8% and Northern Territory it is down by 3 ½%. The global scenario and the interest rates will take its toll on the Australian housing finance commitments in the future months. The negative trend in the demand for property can further lower interest rates. The reason for the crisis is stated that, the investors are unwilling to take high security home loans. The demand for housing loans has drastically reduced since July last year. It is also stated that with the weakening in the real estate sector the interest rates are more to fall.