Overall the profile for housing finance is a positive one for residential construction activity in coming quarters, said the Housing Industry Association, the voice of Australia’s residential building industry.
Over the three months to April 2014 HIA’s seasonally adjusted estimate shows an increase in the number of loans for new housing in New South Wales of 1.1%, a rise of 5% in Victoria, a rise of 5.5% in Queensland, a rise of 7.5% in South Australia, a rise of 6.9% in Western Australia and a rise of 10.7% in Tasmania.
But levels fell considerably in the Northern Territory and in the Australian Capital Territory. The number of new housing loans fell by 31.8% and 40% respectively.
Meanwhile, preliminary ABS figures show strong growth in residential building activity in the March 2014 quarter. There was over $13 billion of residential building work done in the March 2014 quarter, a 6.8% increase over the previous quarter and a level 8.4% higher than the March quarter a year ago.
‘Dwelling approvals activity was particularly strong in the final quarter of 2013, so it is natural that we now see an improvement in the level of building work being done. The figures are the first official statistics confirming that the strong leading indicators that we saw late last year are flowing through to strong levels of residential building activity on the ground,’ said HIA economist, Geordan Murray.
‘Aside from a single quarter in 2010 when activity surged in response to fiscal stimulus during the financial crisis, the March 2014 quarter was the highest level of residential building work done in any other quarter on record,’ he explained.
He also pointed out that the value of work done on multi-unit dwellings reached a new high in the March 2014 quarter, this is consistent with the indications from housing approvals data. The jump in the value of work done on multi-unit dwellings was the strongest driver of the overall improvement in activity, accounting for around two thirds of the growth in the quarter.
‘It is encouraging to see work done on detached homes posting strong gains. Also, a second consecutive quarterly improvement in the amount of work done on home renovations is a positive sign for this part of the industry after activity dropped to decade lows in 2013,’ added Murray.
The value of work done on new detached homes increased by 4.7% in the March quarter of 2014 to a level that is 2.4% higher than that of a year earlier. The value of work done on multi-unit construction increased by 12.7% in the March quarter of 2014 to a level 19.6% above the level recorded in the March quarter of 2013.
The value of work done on renovations increased by 0.7% in the March 2014 quarter to a level 5.8% higher than the corresponding period last year.
