03/11/2020 - 13:11

WA leads dwelling approvals as loans set record

03/11/2020 - 13:11

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The number of loans for home construction nationwide set a new record during September, according to the latest Australian Bureau of Statistics data.

WA leads dwelling approvals as loans set record
WA recorded the largest increase (42.6 per cent) in total number of dwellings approved during September compared to August. Photo: Gabriel Oliveira

The number of loans for home construction nationwide set a new record during September, according to the latest Australian Bureau of Statistics data.  

Housing Industry Association chief economist Tim Reardon said loans for the construction of a new dwelling increased by 27.1 per cent, which he said was the highest result since the ABS started collection of this data in 2002.

The ABS also released its building approvals data today, which is a more lagged indicator of future building work, and it shows the third strongest month of approvals for detached houses in the past 16 years,” Mr Reardon said.

“We do not expect this to be the peak of the cycle.

“Today’s ABS data confirms the surge in building work entering the pipeline and is consistent with the results from HIA’s new home sales over recent months.

“Based on the strength of new home sales in September, we expect finance approvals and building approvals to continue to be strong next month, before the positive impact of HomeBuilder starts to slow.

“These high volumes of sales, loans and approvals following the announcement of HomeBuilder will be relatively short lived.

“HomeBuilder was designed to provide consumers with confidence to return to the detached housing market. It has been very effective at achieving this goal.”

Mr Reardon said new work entering the pipeline would offset the significant declines observed when COVID-19 hit full force in March, and that it would help support a stable supply of new building projects over the next nine months.

“When balanced against the June quarter, the record volume of loans and approvals will not lead to a record number of new home commencements,” he said.

“Approvals for detached houses are identical in the year to September 2020 compared with the previous 12 months. This is a very good outcome considering the speed and extent of the downturn in new detached housing observed in the first half of the year.

“The improvement in detached building approvals was seen across all jurisdictions during the month of September 2020.

“In other good news, the number of loans to first homebuyers reached the highest number in over a decade. First homebuyers accounted for 40 per cent of the total number of owner-occupier loans issued in September.”

Western Australia recorded the largest increase (42.6 per cent) in total number of dwellings approved during September compared to August, followed by South Australia (28.3 per cent), Queensland (19.3 per cent) and Tasmania (18.8 per cent).

Dwelling approvals in Victoria increased by 12.4 per cent and by 4.6 per cent in NSW.

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