New house lending turns in strong result: HIA's Harley Dale
GUEST OBSERVER
ABS figures for November 2016 demonstrate strength in lending for new housing.
Lending for new housing - to both owner occupiers and investors - turned in strong results in this latest ABS update.
The new home building sector will continue to provide strong support to the broader Australian economy through the first half of 2017.
The number of owner occupier loans for the construction or purchase of a new dwelling increased by 2.7 per cent in November 2016. Meanwhile the value of lending for construction investment reached a new record on a moving annual basis.
The new home lending cycle has peaked, but the November results confirm that the elevated volumes of lending we have seen over the last three and a half years remained in play as 2016 neared an end.
That’s a tick in the box for the Australian economy.
As has been typical throughout this cycle, the profile for new home lending varies widely between states and territories.
Looking beyond just today’s update, it is not surprising that New South Wales and Victoria are faring the best overall.
Compared with 12 months ago, the number of loans for construction and purchase of new homes increased in five out of eight states and territories in November 2016. The fastest annual growth occurred in Tasmania (+28.4 percent), followed by Queensland (+20.0 percent), South Australia (+11.0 percent), New South Wales (+9.9 percent), and Victoria (+9.6 percent). The number of loans for new housing fell in November in the Northern Territory (- 57.9 percent), the Australian Capital Territory (-23.3 percent), and in Western Australia (-9.5 percent).
Harley Dale is chief economist at the Housing Industry Association and can be contacted here.
