Activity in lending to buy or build new homes in Australia remains strong, pointing to a robust market for housing construction in 2022.

And broader housing market lending remains extremely strong.

Released on Tuesday, the latest data from the Australian Bureau of Statistics provides a snapshot of lending activity to households, investors and businesses.

It shows that overall, the seasonally adjusted value of loans that were made to both owner occupiers and investors in relation to housing hit a record $32.812 billion in the month of December.

More importantly for the construction sector, lending activity for purchase or construction of new homes remains at elevated levels despite having come off recent peaks associated with the Commonwealth HomeBuilder program.

On a seasonally adjusted basis, the number of loans made to owner-occupiers to build new homes came in at 4,569 for the month.

That for purchasing newly built dwellings came in at 2,456.

At this level, housing construction lending activity remains at the highest levels on record except for Homebuilder stimulus and post-GFC stimulus periods (see chart).

Meanwhile, lending for home renovations is running wild.

At $548.3 million, the seasonally adjusted value of loans made to owner occupiers for home renovations is slightly off its November record but remains well above levels seen in any other month.

Activity in this sector is being driven by a renewed desire for nicer spaces as the pandemic has forced many to spend more time at home.

Put together, the strength in housing construction lending and home renovations lending bodes well for building and construction in 2022.

The latest data comes as the Reserve Bank of Australia has left interest rates on hold at 0.1 percent for now.

Whilst the Bank refused to give a timeline for its next interest rate move, it indicated that it would not increase the cash rate until actual inflation was comfortably within its desired range of between two and three percent