New home lending rises in australia
The increase provides a stronger set of housing finance indicators for the market, but the results have been hailed as a “disappointing outcome” by the Housing Industry Association.
“Today’s figures show that new home lending for owner occupiers is tracking higher overall, but at a very moderate rate from a low base,” said HIA Senior Economist, Shane Garrett. “For owner occupiers, the aggregate number of loans for the construction and purchase of new homes was flat during April 2013, itself a disappointing outcome, but the number was 17.9 per cent higher than twelve months earlier.”
The number of seasonally adjusted loans for construction “barely moved” in April, rising by only 0.2 per cent, while loans for the purchase of new dwellings eased back by 0.4 per cent. The number of loans for established homes net of refinancing rose by 1.0 per cent during April and was 4.9 per cent higher than a year earlier.
In terms of owner occupiers, the value of loans for the construction or purchase of a new home rose by 2.5 per cent during April 2013 and was 20.1 per cent higher than a year earlier. Lending for established dwellings was a little weaker, with the value of loans falling by 1.6 per cent during April. Nonetheless, the value of lending for established dwellings was still 7.1 per cent higher than twelve months previously.
In April 2013 the total number of seasonally adjusted owner occupier loans for new home building (combining loans for construction and purchase of new dwellings) increased by 1.9 per cent in New South Wales and was up by 6.4 per cent in Western Australia, 3.7 per cent in Tasmania, and 2.0 per cent in the Australian Capital Territory. The number of loans for new homes fell by 5.7 per cent in Victoria, 1.1 per cent in Queensland, 0.3 per cent in South Australia, and 8.4 per cent in the Northern Territory.
The investor side of housing finance provided a stronger result, driven by the existing property market. The aggregate value of loans to investors rose by 1.1 per cent in April. However, in a weak update the value of lending for the construction of new residential property fell by 13.3 per cent and was down by 8.1 per cent over the three months to April this year.
“The increase in investor activity with regard to existing property suggests that a view is taking hold that the market outlook is improving. However, residential investment in construction continues to languish near decade lows, a pointer to the disincentive to new home building attributable to excessive tax and regulatory costs,” warned Garrett.