New home lending falls down under

The number of loans advanced for the purchase and construction of new build property slipped to 8,347 on a seasonally-adjusted basis, which the Housing Industry Association has labelled a “timely warning against complacency”.

In the three months to August, the number of loans to owner occupiers for the construction and purchase of new homes surged 13.3 per cent compared to the same period last year, while the number of loans for the purchase of new homes was 0.6 per cent higher.

But HIA Senior Economist Shane Garrett cautions: “Compared with twelve months ago, new home lending activity has increased markedly. However, growth has completely stalled over the past six months even though activity was already rather low by historical standards.”

The HIA is calling for another interest rate cut from the RBA before the end of the year to help the market’s recovery to really take hold.