Oz builds on the up

Borrowing levels from housebuilders for the construction of new residential properties in Australia increased by 2.8per cent month-on-month in June, and is now up by in excess of 60per cent from its low of October last year, according to Australian Bureau...

The strong rise in lending for the construction of new property in Australia suggests that more new homes in Australia are now in the building pipeline, which should aid the country's housing shortage.

Macquarie Securities associate economist Benjamin Dinte said the data should alleviate some of the Reserve Bank's concerns over the lack of new housing and flow-on rise in property prices.

Dinte said: "Policymakers will be pleased that lending has increased substantially for the construction of new dwellings in the past few months, and they will be looking for this trend to continue to flow through into building activity over the year ahead."

Over the past week or so, the Reserve Bank of Australia and the International Monetary Fund have expressed concerns about potential price bubbles in Australia's housing market, due largely to a shortage of new homes coming onto the market.

However, Housing Industry Association chief economist Harley Dale estimated that the volume of housing starts would increase by 15per cent by the end of this year, supported by low interest rates and the first-home buyer stimulus which has been extended until 30 September.

Source: www.homesoverseas.co.uk/news