The seasonally adjusted number of loans for construction increased by 0.9% in May 2014 and was up by 3.1% in the three months to May, the ABS data shows.
Loans for the purchase of a new homes increased by 1.6% in May, but fell by 1.6% over the three month period. According to the Housing Industry Association, the voice of Australia’s residential building industry, it is an encouraging forward sign for new home building that the number and value of loans for both construction and new dwellings purchase headed higher.
‘Construction loans, the principal component of new home lending, are at their highest level in over four years. New dwelling commencements are on track to hit their second highest level on record in 2014,’ said Harley Dale, HIA chief economist.
‘It is also encouraging to see that lending for larger alterations and additions is moving higher since a low point reached in February. The market hit a decade low in 2013 and a turnaround this year would clearly be a desirable outcome,’ he explained.
‘With low interest rates and the recurrence of capital gains, there is the opportunity for the market to gather upward momentum,’ he added.
Over the three months to May 2014 HIA’s seasonally adjusted estimate shows the number of loans for new housing in New South Wales rose by 2.1%, by 0.6% in Victoria, by 7.6% in Queensland, by 8% in Western Australia and by 13.8% in Tasmania.
Over this three month period the number of new housing loans fell by 4.4% in South Australia, by 9.9% in the Northern Territory and by 12.4% in the Australian Capital Territory.
