The latest housing finance figures from the Australian Bureau of Statistics show that the number of loans for the construction and purchase of new owner occupied homes edged up by 0.6%, some 13.3% higher than in June 2012.
Housing finance commitments for both new and established owner occupied housing increased by 1% in New South Wales, by 1.9% in Victoria, by 4.4% in Queensland, by 2.9% in South Australia, by 1.3% in Tasmania, by 1.1% in the Northern Territory and by 5.3% in the ACT. Lending fell by 1.6% in Western Australia.
The figures confirm that there is a steady recovery in the new homes market, according to the Housing Industry Association, the voice of Australia’s home building industry.
‘Encouragingly, growth in new home lending has affected most states, with particularly strong figures from the ACT and South Australia during June,’ said HIA senior economist, Shane Garrett.
He pointed out hat the continued growth in activity in new home lending is being driven by the reductions in interest rates which have taken place since 2011 as well as a growing sense that the worst of the international crisis has passed.
But he also said that it is important to bear in mind that the level of activity in the housing market is well below what is merited given the strong growth in population.
‘The market will need considerable support to rise to the required levels. The recent RBA cut is welcome from this perspective but issues like the taxation burden on new home building and regulatory restrictions on land availability represent serious impediments to growth,’ he explained.
‘Delicate sentiment in the market is evidenced by the fact that lending to investors for new home purchases fell by 1.3% during June. As long as sentiment is shaky, the prospects for future growth in the market remain uncertain,’ he added.
