Construction Industry Hails Another Housing Recovery Sign 2

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Monday, July 15th, 2013
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Building and construction industry lobby groups in Australia have welcomed further signs of a recovery in housing starts, with the latest figures showing lending for the purchase and construction of new homes at three year highs.

Building and construction industry lobby groups in Australia have welcomed further signs of a recovery in housing starts, with the latest figures showing lending for the purchase and construction of new homes at three year highs.

In May, the combined number of new loans for the purchase or construction of new housing edged up 0.6 percent on a seasonally adjusted basis and is up 18.1 percent compared with the same month in 2012, ABS figures released last week show.

Whilst 5,367 loans (seasonally adjusted) were made for new home construction (up 0.6 percent), the number of loans made for purchases of newly built homes edged up 0.7 percent to come in at 2,993.

The number of loans made for the purchase and construction of new homes has now risen for six consecutive months and sits at three year highs (see chart).

Though cautioning the current pace of improvement remains modest and does not imply a recovery of sufficient strength to meet population requirements, HIA Economist Diwa Hopkins welcomed the latest data.

“Today’s figures show that new home lending to owner occupiers is continuing to consolidate the stronger gains made earlier on in the year” Hopkins says.

“Looking at new home lending across the states and territories, it is encouraging to see that these improvements have been reasonably broad-based. In most jurisdictions, the number of loans over the three months to May 2013 is substantially higher than twelve months ago. The unfortunate exception is Tasmania, where new home lending has suffered a particularly protracted decline.”

Master Builders Australia Chief Economist Peter Jones also welcomed the figures, which he says suggests interest rate cuts are finally starting to take hold and the recovery is starting to strengthen.

AUST New Home Lending

In terms of states, the Northern Territory led the way, recording a 4.7 percent rise in seasonally adjusted loans for new and established housing combined (the ABS does not provide separate figures for new homes on a state by state basis), followed by Queensland (3.9 percent), Western Australia (3.4 percent), Victoria (2.6 percent), Tasmania (1.7 percent), New South Wales (1.0 percent and South Australia (0.6 percent).

Only the Australian Capital Territory (down 0.5 percent) saw a contraction in commitments.

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2
  1. Cliff Rix

    One lives in hope

  2. Andrew Heaton Andrew Heaton

    That’s right Cliff. It will be interesting to see the latest reports on construction activity and construction starts when ABS data for these comes out tomorrow.

    Do you think there will be much of a recovery over the next year?