Home loan approvals for construction of new homes in Western Australia show the heat has come out of the market considerably, with the number of loans issued down 14 per cent on the same time last year.
The Australian Bureau of Statistics said 1,279 loans were issued in February to build new homes, down from 1,496 in the same month last year and way off the 2014 peak of 1,945 in May.
The figures follow lacklustre building approvals statistics released at the start of the month, which showed there were 2,092 dwellings approved in February, down more than 1,200 from the peak of 3,239 in July last year.
Overall, lending for houses nudged higher in WA in February, improving slightly from January when home loans recorded the monthly biggest fall since early 2010.
The ABS said the total number of home loans for owner-occupiers rose to 7,434 in February, in seasonally adjusted terms, up 1 per cent from the 7,361 loans recorded in the previous month.
But in January the number of loans was down 6.4 per cent, the ABS said, the biggest monthly fall since an 8.9 per cent drop in March 2010.
The WA figures were largely in line with national home loan demand in February, with 53,614 loans approved during the month, up 1.2 per cent on January.
The increase came on the back of a small spike for new housing, with 2,600 home loans approved for the construction of new homes, up 5.6 per cent on January.
However, the total value of home loans approved was down 1 per cent, Mortgage Choice spokesperson Jessica Darnbrough said.
Ms Darnbrough said the slight decrease in the value of loans issued was expected, with recent research showing home values were also flat during the month of February.
“The CoreLogic RP Data February Home Value Index found dwelling values across Australia’s combined capital cities rose by just 0.3 per cent throughout the month, most of which was driven by Sydney,” Ms Darnbrough said.
“Sydney is the only capital city to record double digit dwelling value growth over the last 12 months – significantly higher than its nearest competitor Melbourne which has recorded property value growth of 7.4 per cent over the last 12 months.”