Housing finance in australia flatlines
Housing finance flat-lined in Australia in October, according to new figures.
Looking over the three months to October this year, the number of loans is up for new dwellings, down for construction, and up for existing property. Across states and territories, new home lending is up in New South Wales, Western Australia, and Tasmania, but is down in Victoria, Queensland, South Australia, the Northern Territory, and the Australian Capital Territory. Meanwhile, the value of loans for investment purposes increased for both new construction and existing property.
The result provides little additional insight into the prospects for a sustainable recovery in new home building in 2013, said the Housing Industry Association.
"There has been some modest improvement in total housing finance since mid 2012 and at face value that is an encouraging development," said HIA's Chief Economist, Harley Dale.
"Some signs of recovery are better than none and that is what the housing finance figures are showing. A pull-back in loans for construction over the October 2012 ‘quarter' is clearly an area for concern, however, as is the decline in new home lending in a majority of state and territories," Harley Dale said. "We also need to take note that a methodological issue with the measurement of housing finance may be exaggerating signs of recovery in 2012."
"The bottom line is that across finance and the full suite of leading housing indicators, there would normally be clearer signs of a new home building recovery by now given where interest rates are set," added Harley Dale.
"Monetary policy is not as effective in this cycle and more cuts should be delivered. However, governments can't sit back and presume that lower interest rates will do all that is required to elicit the recovery in residential construction required to rebalance economic growth."
In the month of October 2012 the number of loans for the purchase of new dwellings continued to recover in an encouraging manner, increasing by 4.2 per cent, but the number of loans for construction eased by 0.3 per cent and is at its lowest level since January. The number of loans for existing property, net of refinancing, eased by 0.1 per cent. On the investment front, the value of loans for existing property fell by 1.5 per cent, but the value of loans for construction jumped by 129 per cent.
In October 2012 the total number of seasonally adjusted loans for the construction and purchase of new homes rose in three states, increasing by 6.7 per cent in New South Wales, 1.8 per cent in South Australia, and 2.9 per cent in Western Australia. The number of loans fell by 0.2 per cent in Victoria, 3.0 per cent in Queensland, 12.5 per cent in Tasmania, 7.7 per cent in the Northern Territory, and 4.8 per cent in the Australian Capital Territory.