Lending to finance new home construction has surged to record levels in Australia as buyers rush to cash in on the HomeBuilder grant, the latest data suggests.

On a seasonally adjusted basis, the Australian Bureau of Statistics says that the number of new loans which were made to owner occupiers for the purpose of constructing a new dwelling jumped by 27.2 percent to come in at 5,948 – the highest level on record in eighteen years of data.

New construction loans have now risen by 64 percent over the past three months.

Compared with the same period last year, new construction loans are up by 35 percent during the September quarter.

The data comes amid further encouraging data on building approvals, which rose by 15.4 percent in September.

Approval activity has been particularly buoyant in the normally statistically stable detached house segment of the market which has risen by more than a quarter over the past two months.

Housing Industry Association Chief Economist Tim Reardon welcomed the latest developments, saying that the Commonwealth HomeBuilder grant was having its desired impact.

But he cautioned that the numbers do not imply record levels of new home construction as they come off an extremely weak June quarter.

“Today’s ABS data confirms the surge in building work entering the pipeline and is consistent with the results from HIA’s New Home Sales over recent months,” he said.

“Based on the strength of New Home Sales in September, we expect finance approvals and building approvals to continue to be strong next month, before the positive impact of HomeBuilder starts to slow.

“These high volumes of sales, loans and approvals following the announcement of HomeBuilder will be relatively short lived. HomeBuilder was designed to provide consumers with confidence to return to the detached housing market. It has been very effective at achieving this goal.

“This new work entering the pipeline will offset the significant declines observed from March as restrictions were announced and will ensure a stable supply of new building projects over the next nine months.