Loans for new homes creeping up

Loans for new homes creeping up

Posted on Monday, November 10 2014 at 1:35 PM

Figures from the Australian Bureau of Statistics (ABS) reveal that new home lending reached a fresh high for the cycle in the September 2014 quarter.

“From the
stimulus-fuelled period around the GFC, lending for new housing is at its
highest in 20 years,” Housing Industry Association (HIA) chief economist Harley
Dale says.

“That is a healthy
result in terms of the short-term outlook for new home construction,” he notes.

“The
demand for new housing reflects activity from first homebuyers, trade-up owner
occupiers and investors.”

“The aggregate
number of loans for first homebuyers is still very low from a historical
perspective. Policy reform is vital to turning this situation around and needs
to be aimed at the excessive and inefficient taxes and regulation levied on
housing,” Dale says.

“First homebuyer
loans reached conspicuous troughs in the early months of 2011, 2013 and 2014,
although these levels were 12 per cent higher than the record low in the early
1990s recession. Loan numbers have only lifted by 5.1 per cent from this latest
2014 trough.”

There were differing
outcomes across the housing finance spectrum in the September 2014 results. The
total number of seasonally adjusted loans to owner-occupiers fell by 0.7 per
cent. Loans for the construction of new homes increased by 3.1 per cent while
lending for the purchase of a new dwelling ticked up by 0.1 per cent. The
number of loans for existing property (net of refinancing) eased by 0.1 per
cent in September.

The (original)
number of first homebuyer loans fell by 4.8 per cent in the September 2014
quarter, while the number of trade-up buyer loans increased by 1.3 per cent.
The moving annual value of lending for construction of new investment property
was 7.1 per cent higher in September than in June, while the comparable rate of
growth for the much larger existing property component was 6.0 per cent.

In the month of
September 2014, HIA’s seasonally adjusted estimate shows increases in the
number of owner-occupier loans for new housing in New South Wales (+5.1 per
cent), Queensland (+4.9 per cent), South Australia (+8.5 per cent), the
Northern Territory (+17.8 per cent) and the Australian Capital Territory (+14.6
per cent). Elsewhere, the number of new home loans declined by: 1.6 per cent in
Victoria; 1.1 per cent in Western Australia; and 11.3 per cent in Tasmania.

When it comes to
investment housing commitments, the ABS figures show that the number of first
homebuyer commitments as a percentage of total owner-occupied housing finance
commitments rose to 12 per cent in September, from 11.8 per cent in August.
Between those two months, the average size of a loan for first homebuyers went
up by $9,800 to $310,200.

The value of
outstanding housing loans financed by authorised deposit-taking institutions at
the end of September was $1,334, 380 million, up 0.6 per cent from the month
before. 

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