The short-term stimulus from HomeBuilder is emerging in the housing finance data released by the ABS. And the HIA’s Chief Economist Tim Reardon says this is particularly evident in the issuing of loans for the construction of new homes and in lending to first home buyers. Source: Timberbiz
“The number of loans for the construction of a new dwelling increased by 22.9% in August 2020 to its highest level in over a decade,” Mr Reardon said.
“Not only does this data show that there has been an increase in the number of loans for the construction of a new home, there was also an increase in the purchase of residential land as well as new and established homes.
“There has been a substantial improvement in sentiment and confidence in the housing market.”
Mr Reardon said that the increase in construction loans could be seen across all jurisdictions except for NSW.
More leading indicators of building work entering the pipeline suggested that the pickup in building work in NSW has been slower, but it is emerging.
“The number of loans to first home buyers also rose significantly in August. Loans to first home buyers in the three months to August 2020 are now 24.1% higher than for the same time last year,” he said.
First home buyers were able to take advantage of the low interest rate environment as well as various government incentives such as HomeBuilder, the First Home Loan Deposit Scheme and discounts and exemptions on stamp duty. This had offset the adverse impact of tighter lending criteria for first home buyers.
“It is evident that there will be an increase in work on the ground in the December quarter this year which will protect jobs in the construction industry and the broader economy,” Mr Reardon said.
Across the states, the number of loans to owner-occupiers in August for the purchase or construction of new dwellings increased in Tasmania (+48.9%), the Australian Capital Territory (+39.9%), Queensland (+26.2%) Western Australia (+24.6%), South Australia (+14.0%) and Victoria (+2.8%). They declined in New South Wales (-11.0%) and the Northern Territory (-20.4%).
