Finance levels for new home building in Australia have surged to heights not seen since post-GFC federal government stimulus measures as the latest figures show yet more evidence of strengthening activity in residential construction throughout the country.
On a seasonally adjusted basis, data from the Australian Bureau of Statistics indicates that the combined number of loans made for either the construction of new owner-occupied dwelling units or the purchase of newly built owner-occupied houses and apartments throughout the nation jumped by 3.5 percent in January to come in at 8,845 – the highest level on record since December 2009.
Leading the charge were loans made for the construction of new owner-occupied housing, which jumped almost six percent in seasonally adjusted terms to come in at four year highs of 6,081; the number of loans made for the purchase of newly built dwellings eased back 1.0 percent to come in at 2,764.
Outside of the owner occupied segment, however, a 3.3 percent drop in seasonally adjusted estimates for the overall dollar value of loans made to investors (new and existing housing combined) may indicate a drop in investor demand for new housing, albeit from a high base (the ABS does not give separate data for new housing and existing housing within the investor segment).
Despite this, Housing Industry Association economist Diwa Hopkins welcomed the latest figures, noting that the data also provided evidence of a broadening recovery outside of New South Wales and Western Australia.
Compared with the same period twelve months earlier, for example, the figures show a rise loan numbers for new housing (purchase or construction – owner occupied) over the three months to January of around a third in South Australia and almost a fifth in Queensland.
“We wouldn’t be discouraged by this development and it is actually in line with our forecasts” Hopkins said, referring to moderating data in New South Wales and Western Australia.
“We’re expecting the recovery in residential construction to spread to and gather momentum in other key states including Queensland and South Australia while the pace of improvement eases in NSW and WA.”
Master Builders Australia Chief Executive Officer Wilhelm Harnisch said the data supports the picture of a strengthening housing recovery, but called on the Reserve Bank to leave monetary settings at their current accommodative level and on the government to spell out a broader strategy to underpin business and consumer sentiment in the May budget.