New home lending remains steady in Australia

Taylor Scott International News

New home lending activity in Australia remained healthy at the start of the new financial year, according to the latest data from the Australian Bureau of Statistics. Although the number of loans to owner occupiers purchasing or constructing new homes slipped by 0.8% in July, over the three months to July the number of these loans continued their upward momentum with an increase of 1.9%. Also, compared with a year earlier, the number of loans in the latest three months is 8.8% higher. ‘In an encouraging sign for new home building, lending activity for much needed new housing appears to be consolidating the recovery of the previous financial year, said Diwa Hopkins, Housing Industry Association economist. ‘Lending to investors constructing new homes made a strong recovery throughout the 2013/2014 financial year and this data reinforces the strength of that improvement. The value of this investment lending component in the three months to July 2014 is 10.5% higher than in the same period in 2013,’ she explained. ‘The figures show that current credit conditions are having the desired impact on residential construction, with both investors and owner occupiers taking advantage of the favourable conditions to add to Australia’s stock of housing, which will aid housing affordability across the spectrum of the housing market,’ she added. She pointed out that policy makers at all levels of government must be acting and coordinating to address existing barriers to further growth in the new housing stock. Examples include excessive taxation, zoning and approvals delays. ‘These impediments need be addressed in order for new home building to gather a further leg of recovery in 2015,’ she said. A breakdown of the figures show a 9% rise in the number of owner occupier loans for new housing in New South Wales. But the number of new home loans fell by 2.8% in Victoria, by 2.9% in Queensland, by 4.2% in South Australia, by 7.6% in Western Australia, by 7.7% in Tasmania, by 14% in the Northern and by 8.4% in the Australian Capital Territory. Over the three months to July 2014, however, lending increased in six out of the eight jurisdictions. Continue reading →

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