Lending For New Homes Rises

Posted on 16/05/2017  
Lending For New Homes Rises

Lending for the purchase of new homes around Australia was up 8% in the first quarter of the year, following a resurgence in March.

The fickle nature of monthly statistics on the housing industry is shown by the latest housing finance figures from the ABS show that lending to owner-occupiers to build or purchase new homes rose 4.3% in March. This follows two consecutive monthly declines in January and February.

"After the housing finance figures showed a relatively soft start to the year, a jump in March saw the number of loans to owner-occupiers building or buying new homes increase by 4.3%," says HIA Economist Geordan Murray.

He says the monthly increase in new home lending was primarily driven by an increase in the number of loans to those purchasing new homes, which were up by 9.5% in March (as distinct from loans for building new homes).

“Furthermore, during the full March 2017 Quarter lending activity in this part of the market was 8.1% higher than a year earlier.”

Murray notes that a growing number of apartment projects that have been under construction over the last couple of years are now reaching completion - which means that buyers who purchased off-the-plan are now reaching the settlement stage.

“We expect to see lending in this part of the market continue to rise over the year ahead as more apartment projects reach completion,” Murray says.

"The number of loans for construction of a new home, which typically represent households building a new detached house, also posted an improvement in March, but the overall number has generally been quite stable over the last couple of years.

“The number of loans for the construction of a new dwelling was up by 1.9% on the previous month.”

The number of loans to owner-occupiers constructing or purchasing new homes during the March 2017 Quarter was stronger than a year earlier in five of the eight states and territories.

The largest increase was recorded in Queensland (+10.9%), followed by Tasmania (+10.1%), Victoria (+9.2%), South Australia (+6.5%), and New South Wales (+3.8%). The largest fall was recorded in the Northern Territory (-35.5%), followed by Western Australia (-7.6%).

 

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