Lending to owner occupiers to build or buy up in March

Lending to owner occupiers to build or buy a new home increased by 4.3 percent in March 2017 after month on month declines in January and February, according to the Australian Bureau of Statistics.

Loans to buy a new dwelling were up by 1.9 percent on the previous month.

Lending during the full March 2017 quarter was down by 0.4 percent on the level a year earlier.

Geordan Murray, economist, HIA, said after the housing finance figures showed a relatively soft start to the year, a jump in March saw the number of loans to owner-occupiers building or buying new homes increase by 4.3 percent.

“The increase in new home lending during the month was primarily driven by an increase in the number of loans to those purchasing new homes, which were up by 9.5 percent in the month," he said.

"Furthermore, during the full March 2017 quarter lending activity in this part of the market was 8.1 percent higher than a year earlier.

"The number of loans to owner-occupiers constructing or purchasing new homes during the March 2017 quarter was stronger than a year earlier in five of the eight states and territories.

The largest increase was recorded in Queensland (+10.9 percent), followed by Tasmania (+10.1 percent), Victoria (+9.2 percent), South Australia (+6.5 percent), and New South Wales (+3.8 percent).

The largest fall was recorded in the Northern Territory (-35.5 percent), followed by Western Australia (-7.6 percent) and the ACT (-2.4 percent).

"A growing number of apartment projects that have been under construction over the last couple of years are now reaching completion.

"This means that buyers who purchased off the plan are now reaching the settlement stage.

"We expect to see lending in this part of the market continue to rise over the year ahead as more apartment projects reach completion."