Residential
Explore
It's been widely acknowledged that introducing new housing stock is a key way to address housing affordability issues, while stimulating economic activity at the same time. However, with all of the efforts being made recently to keep construction going, has there been a noticeable effect? From cash rate cuts to budget announcements, it seems every time you open the newspaper someone is trying to elevate the profile and performance of the building industry. And the good news is, it appears to be working.
According to the latest home loan figures released by the Australian Bureau of Statistics (ABS), the number of finance commitments for the construction or purchase of new homes in April showed a significant increase. With the May cash rate cut and several other announcements since then, more good news should be expected from the economic data when it becomes available.
The seasonally adjusted estimates for new lending shows an uptick of 4.3 per cent for construction loans, while mortgages for newly built homes for sale rose by 1.6 per cent. The figure for established dwellings were also positive, with a 0.5 per cent increase, although not nearly as exciting as the major shift towards new housing.
Harley Dale, chief economist for the Housing Industry Association (HIA), noted that these numbers take the construction industry to new heights.
"The April results include an increase in lending for investment in new residential dwellings which took the annual value to in excess of $9 billion for the first time ever," he said on 9 June.
Dr Dale went on to state that while the number of first time buyers was still low - 15.2 per cent in original terms, according to the ABS - it was the highest annual level we have seen in a year. It seems that the market is balancing out in terms of the players that are involved, and the number of owner-occupiers entering the market is also encouraging. In fact, while home loans to investors increased by 2.6 per cent, owner-occupiers swelled their numbers by 3.1 per cent, taking total dwelling finance commitments to 2.9 per cent.
Those looking at houses for sale weren't just concentrated in one area either, as the ABS reveals that home loans for non-investors increased in every state and territory, except Western Australia which remained stable.
With interest rates looking to remain low for some time, a surge in activity can probably be expected for real estate in Australia. Make sure you're on top of local market conditions by talking to a real estate agent in your area.
