What brings developments to market is a good mix of investors and owner occupiers who can ensure that pre-sale commitments are met and projects go from planning to construction.
An increase in lending finance for owner occupiers in June 2015 according to the latest ABS figures will support continued new housing activity. ABS Lending Finance showed a growth in owner occupied housing of 5.5 per cent in seasonal terms on the previous month. For the 12 months ending June 2015 the improvement nationally was 7.9 per cent.
Investment loans specifically for new dwelling construction dropped by 5.4 per cent for the month of June while investment loans for existing homes stalled with the lowest result since February 2015. Overall investor lending also dropped as a proportion of total housing lending finance to 41.6 per cent indicating that lending restraints on investors may be starting to have an impact. These numbers shine a light on the strength of the owner occupier market in 2015.
Although these numbers are strong it is likely that a reduced appetite for lending to investors will start to impact on the number of homes that will proceed through to development. What brings developments to market is a good mix of investors and owner occupiers who can ensure that pre-sale commitments are met and projects go from planning to construction.
Keeping a strong pipeline of new housing supply for owner occupiers and renters alike is essential to take pressure of prices.