Housing finance data a mixed bag

The latest housing finance data released by the Australian Bureau of Statistics has found that new home building loans in November 2013 remained strong, with the Housing Industry Association (HIA) noting that it is a positive for the home building activity.

Despite this positive number, with owner occupier loans for new dwelling construction increasing by 2.3%, loans for the purchase of new dwellings fell by 4.3% over the month.

“Overall, this means that the number of loans to owner occupiers for new dwellings was flat during November but the further gain to construction loans is a positive for new home building activity in early 2014,” said HIA’s senior economist, Shane Garrett.

“Lending for new homes is up substantially on a year ago and the strong state of the market is also captured by the 1.2 per cent rise in loans for existing home purchase during November,” Garrett said.

“The value of loans to investors rose by 1.5 per cent during November and this is consistent with the new mood of confidence in Australia’s housing market.”

Over the month, owner occupier loans increased by 0.6% in trend terms, and with total lending for housing growth being steady, it is of much disappointment to some that first home buyers remained at a record low in the latest release.

The Real Estate Institute of Australia particularly emphasized this point, with president Peter Bushby noting the overall increases seen in New South Wales, Tasmania, Queensland and Western Australia.

“The proportion of first home buyers in the number of owner-occupied housing finance commitments fell to 2.3% compared to the October figure of 12.6% and is the lowest figure since data began to be collected in July 1991. It is far lower than the long-run average proportion of 19.9%, despite eight interest rate cuts since November 2011,” said Bushby, urging the government to review first home buyer support.

Tasmania was the stand out with a 2.4% overall increase from a low base, while the ACT dropped the most, by 1.4%.

Premier Lara Giddings is confident with this number, noting that the property sector is improving.

“Low interest rates and the Tasmanian Jobs Package seen owner-occupied home loans rise for nine consecutive months and grow faster than every other state in the country,” Giddings said.

“ABS figures also show a steady pick up in the number of first home buyers, which has been supported by the Government’s $30,000 First Home Builder’s Boost.”

Currently, the state’s treasury figures show that there have been 23 successful applications for the $30,000 boost since its November increase, and that there are more applications being processed.

“The full $30,000 First Home Builders Boost is available until the end of 2014, even after the $7000 First Home Owner’s Grant for existing homes expires at the end of June 2014,” she said.


Jennifer Duke

Jennifer Duke

Jennifer Duke was a property writer at Property Observer

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