The number of construction loans and loans to households purchasing new homes is slightly below peak levels recorded in late 2015 and early 2016 and is consistent with high levels of new home building, says HIA Economist, Geordan Murray.
Latest housing finance figures released by the ABS today show the number of loans to households building and purchasing new homes held steady at a relatively high level in September 2016, said the Housing Industry Association, the voice of the residential building industry.
“The total number of construction loans and loans to households purchasing new homes has remained stable over recent months. The total is slightly below the peak levels reached in late 2015 and early 2016, although remain very strong and consistent with the high level of new home building occurring,” said HIA Economist, Geordan Murray.
“In total, there were 34,428 loans to owner occupiers purchasing homes during September 2016 (excluding re-financing), which is up by 0.5 per cent on the level recorded in August, although it is 7.8 per cent lower than the number recorded in the same month last year.”
“The level of lending to households buying new homes was similarly steady during the month. The number of construction loans fell by 0.3 per cent in September, and was down by 3.3 per cent down on the level recorded year ago. Lending activity in this part of the market reconciles quite well with indicators tracking the new home building activity. It is likely that the new home building cycle peaked in 2016 and that we’ll see activity moderate as we progress through 2017.”
“It was also interesting to note that there has been a modest uplift in lending to investors in recent months. We can expect some further uplift in this part of the market over the year ahead as an increasing number of the new homes currently under construction reach completion and off-the-plan purchases by investors reach settlement.”
The number of loans for construction and purchase of new homes during the September quarter of 2016 increased compared with the previous year in Tasmania (+17.5 per cent), Northern Territory (+16.3 per cent), the Australian Capital Territory (+7.9 per cent), Queensland (+7.6 per cent), South Australia (+4.3 per cent) and Victoria (+2.0 per cent). Lending activity fell by 2.6 per cent over this period in New South Wales, and by 18.8 per cent in Western Australia.