New home lending data released by the Australian Bureau of Statistics indicates further strength in residential construction, according to the Housing Industry Association (HIA), the voice of Australia’s residential building industry.
HIA Economist, Diwa Hopkins observes that the owner occupier segment of new home lending is showing encouraging signs; following a strong result in January, the number of owner occupier loans for the construction of new dwellings increased again in February by 0.8 per cent. The rise over the three months to February was 7.2 per cent.
She adds that the strong growth in housing finance is consistent with other leading indicators of the residential construction sector, including dwelling approvals and new home sales.
While the number of owner occupier loans for the construction of new dwellings increased in February 2014, loans for the purchase of new dwellings declined by 5.0 per cent in the same period, resulting in the total number of new home loans to owner occupiers easing by 1.0 per cent. Over the three months to February 2014 new home lending to owner occupiers still increased by 2.7 per cent to a level that is 15.4 per cent higher than 12 months previously.
Ms Hopkins commented that the value of lending to investors for the purpose of constructing new dwellings for rent or resale increased by 13.2 per cent in the three months to February 2014.
Ms Hopkins concludes that the housing finance results auger well for much needed further growth in new home building while also addressing the persistent problems around housing affordability.