Housing finance figures released today revealed lending for the construction of a new home across Australia hit the highest level recorded in two years, according to the Housing Industry Association.
Housing finance figures released today revealed lending for the construction of a new home across Australia hit the highest level recorded in two years, according to the Housing Industry Association.
The number of loans to owner-occupiers for the purchase of residential land in July 2020 increased across all states and territories compared to July 2019.
Queensland recorded the largest increase at 145.1 per cent, followed by; Western Australia (up 110 per cent); South Australia (105 per cent); Tasmania (100 per cent); New South Wales (65 per cent); and Victoria (35.3 per cent).
HIA chief economist Tim Reardon said there had been a tangible improvement in sentiment and confidence in the housing market.
“Most significant, today’s data shows that there has been a 30 per cent increase in the number of loans issued for the purchase of residential land for the second month in a row,” Mr Reardon said.
“Finance approvals for the purchase of a block of land are now 69.9 per cent higher than in the same month last year.
“This is the first indication of the impact of HomeBuilder. One of the early decision making stages of building a new home is the purchase of a suitable block of land.
“The surge in land sales should see a recovery in the number of slabs being poured as early as the December quarter, as customers proceed through the process to design and construct a new home. This will protect employment in the residential building industry and across the economy into 2021.”
Mr Reardon flagged the risk the surge in lending for land purchases could pose to the sustainability of the market.
“The availability of residential lots where on-site work can begin within the time-frame of the HomeBuilder package could limit take up under the program,” he said.
Master Builders Australia chief executive Denita Warn has also flagged concerns.
“The outlook for the industry and the economy is extremely grim and HomeBuilder should be extended for 12 months in the federal budget to help maintain a pipeline of work and be a lifeline for builders and tradies,” she said.
“Our latest forecasts estimate that HomeBuilder is likely to boost new home building commencements by almost 10,000 during 2020-21 but the sector still faces a forecast of 27 per cent decline.”
