Lending figures point to new home building growth in 2015: HIA

Further growth in new home construction is tipped this year, with the Housing Industry Association's (HIA) senior economist Shane Garrett pointing to the relatively high number of loans.

The November 2014 lending figures recorded by the Australian Bureau of Statistics found that the number of owner occupier loans for new dwellings dropped by 1.4%, however lending was 4.6% higher than November 2013.

New home loans are now up 0.7% in the three months to November and are 7.3% higher than a year prior.

“Last week saw building approvals reach an all-time high during November, and today’s lending figures add further to the evidence that Australia’s new home building industry will start 2015 on a strong footing,” said Garrett.

“The number of loans remains high although there is little sign of further growth,” he said.

“Fortunately, the flow of loans for new home construction is very solid. The number of new home construction loans in November was 7.6% higher than a year ago.”

He did note that the total volume of loans for home purchase has been dropping steadily for the past few months and that, as house prices have risen the stamp duty bills have also.

“Excessive taxation is hampering the efficient operation of Australia’s housing market. The issue requires immediate attention,” he said.

Meanwhile, the Real Estate Institute of Australia suggests the slowing activity may signal a rate cut.

REIA president Neville Sanders pointed to the proportion of first home buyers improving marginally, but noted the potential issues with the statistics.

"With moderating housing lending and GDP growth below trend, inflation well within the RBA’s target zone, the RBA Board should be considering a cut in interest rates at its February meeting,” said Sanders.