In a positive sign for the residential construction sector, housing finance data released today by the Australian Bureau of Statistics show that new home lending grew in the final quarter of the 2013/14 fiscal year.
“The owner occupier segment of new home lending performed well throughout the 2013/14 fiscal year,” said HIA Economist Diwa Hopkins. “Following decent increases in the December and March quarters, lending for the purchase or construction of new homes increased again during the June 2014 quarter, albeit at a more modest pace of 1.0 per cent.”
“Over the full 2013/14 fiscal year new home lending increased by 12.0 per cent. With lending rates remaining very low, turnover in the established home market has risen, as have home prices. The residential construction industry has responded strongly to these signals.”
“In terms of new home lending being a leading indicator of residential building, today’s housing finance figures suggest home building activity should continue its strong recovery as we progress through the second half of the year.”
“There are already signs that the improved supply of dwellings may have taken some of the heat out of price growth, with dwelling price growth decelerating in 2014.”
The seasonally adjusted number of loans for construction increased by 1.1 per cent in the month of June 2014 and was up by 0.7 per cent over the June quarter. Loans for the purchase of a new dwelling increased by 4.6 per cent in June, and increased 1.6 per cent over the quarter.
Over the three months to June 2014 HIA’s seasonally adjusted estimate shows an increase in the number of loans for new housing in: New South Wales (+2.0 per cent); Victoria (+0.3 per cent); Queensland (+11.3 per cent); Western Australia (+9.1 per cent); and Tasmania (+13.4 per cent). Over this three month period the number of new housing loans fell by 0.8 per cent in South Australia.