The new ABS Housing Finance report shows that following weak data in May the number of loans for the construction or purchase of new homes increased by 6.3%.
The outcome at the national level was driven by solid lending figures in New South Wales and Victoria, which grew by 7.3% and 11.3% respectively. This most likely reflects a response to policy changes in these two states, according to the Housing Industry Association, the voice of Australia’s residential building industry.
‘Looking over the three months to June 2012, a modest lift is evident for new home lending and reflects increases in all states and territories. The outcome is encouraging, but the reality is that new home loans have been grinding higher over the past six months rather than mounting a sustained and significant recovery,’ said HIA’s senior economist, Andrew Harvey.
‘Unfortunately we needed to see a much stronger recovery in new home lending coming through in the first half of 2012 to signal a significant turnaround in residential construction. It remains evident that new home starts will bottom at global financial crisis equivalent levels this year, which is a poor outcome for Australian businesses, households, and the wider economy,’ he explained.
‘Across loans for new and established property there has been a modest increase for both first time buyers and trade up buyers over the last year, although its from a relatively low base,’ he added.
The data also shows that first time buyers as a proportion of total owner occupier housing finance commitments rose to 18.3% in June from 17.8% in May, their highest level in five months, and the third successive monthly increase.
The upgrader market remained essentially flat, however, with loans up 1.2% in June, only partially reversing a 1.5% fall in May. Loans to this segment are unchanged from a year ago.
The number of owner occupier home loans approved in June rose 1.3% to 46,859 on a seasonally adjusted basis but below economists' forecasts.
