In a further sign of strengthening conditions in new residential construction in Australia, the latest figures show the number of loans being made to either buy or build new homes remains at near four-year highs.
Data released by the ABS on Monday shows that on a seasonally adjusted basis, the combined number of loans made throughout Australia for either the purchase or the construction of new owner-occupied homes came in at 8,542 in November – almost the same as the previous month’s high of 8,545 and the second highest level on record since the end of the boost to the federal government housing stimulus program in 2009 (see chart).
Whilst the number of loans for the purchase of new houses (2,856) dropped 4.3 percent in seasonal terms, this was largely offset by a 2.3 percent rise in loans for new home construction (5,686).
Over the three months to November, new home purchase and construction loan numbers combined (seasonally adjusted) were up a healthy 13.94 percent compared with the same period one year earlier.
The latest numbers follow earlier November data released last week showing a surge in new home sales to two and a half year highs and continued high numbers of residential building approvals, which despite a slight monthly drop were up by nearly a quarter on the same month one year earlier.
Also, last week’s Performance of Construction Index published by Ai Group showed the building sector recording its third consecutive monthly expansion in December.
Building industry economists welcomed the latest figures.
Despite noting subdued demand from first home buyers, Master Builders Australia Chief Economist Peter Jones said activity is being largely driven by investors and existing home owners wishing to upgrade and was expected to strengthen further in 2014.
Housing Industry Association Senior Economist Shane Garrett, meanwhile, said the latest figures confirmed the continuation of the recovery in residential building.