New home lending in australia rises for third month in a row

8,396 loans to owner occupiers for the construction and purchase of new homes in July 2013, the strongest monthly result since 2010 - a “good result”, according to the Housing Industry Association.

 “This was the third consecutive month that the lending for new homes has increased which continued the steady upward trend that has been evident since the market reached a cyclical low in early 2011,” said HIA Economist, Geordan Murray.

In the month of July, the number of loans to owner occupiers for the construction and purchase of new owner-occupied homes increased by 0.7 per cent and was 15.5 per cent higher than the level in July 2012. Within this result, the number loans for the purchase of new homes increased by 5.9 per cent in the month to a level 52.1 per cent higher than the same month in 2012, while the number of loans for construction fell by 2.1 per cent to be only 1.1 per cent higher than a year earlier.

“This is a good result, but the lack of strong upward momentum for the construction component over 2013 to date is disappointing,” added Murray. “The aggregate value of lending for housing increased by 4.5 per cent in the July 2013 quarter. There has been strengthening demand from both owner occupiers and investors, which in itself is encouraging. This has been driven primarily by lending to those purchasing existing homes,” said Geordan .

In July 2013, the seasonally adjusted number of housing finance commitments (for both new and established owner-occupied housing) increased in NSW (+2.3 per cent), Victoria (+3.3 per cent), South Australia (+0.1 per cent), Western Australia (+1.8 per cent), Tasmania (+1.9 per cent), the Northern Territory (+3.6 per cent) and the ACT (+3.5 per cent). Lending declined by 0.9 per cent in Queensland over the same period.

Murray continued: “The value of lending to owner occupiers for construction and the purchase of new homes increased by 2.5 per cent, while lending to investors purchasing new homes increased by 3.3 per cent in the July quarter of 2013. Despite this, the total increase in lending for new homes only contributed 0.5 percentage points to the quarterly growth,” added Geordan Murray.