New housing finance data indicates continued recovery in residential building but at a more sustainable rate.
Peter Jones, Chief Economist - Master Builders Australia (MBA) observes that despite the flat headline figure for the number of owner occupied housing finance commitments in April, finance commitments underpinning the upturn in residential building activity are holding up.
Though the number of commitments for construction or purchase of new dwellings fell in April, there has been solid growth over the year. According to Peter Jones, commitments for construction of dwellings fell in April, but are up 15 per cent over the year.
Peter Jones explains that investors remain a key driver of the upturn in residential building activity, with the value of commitments for investment housing continuing to power ahead, up by 2.3 per cent in April to be 30 per cent higher than a year ago. However, first home buyers only represented 12.3 per cent of all dwellings financed in April, down two percentage points on the 14.3 per cent last year.
Going forward, builders will be looking to the Government to rollout the details of its national economic growth strategy indicated in the Budget to boost home buyer and investor confidence.