Number of home loans soar

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Lending for the construction of new homes rose dramatically in October, figures from the Australian Bureau of Statistics (ABS) has revealed.

The ABS data showed loans for the construction of new dwellings and the purchase of newly-built homes combined increased by 5.7 per cent.

New housing loans have now officially increased in 13 out of the last 14 months.

But despite the increase in lending to owner occupiers, the Housing Industry Association’s (HIA) senior economist, Ben Phillips, said any increases were being countered by weakness in loans for new investment housing, which experienced a fall of 0.6 per cent.

“Loans for new investment housing were down 10.5 per cent over the last three months relative to the corresponding period of the previous year,” Mr Phillips said.

“The housing industry will be relying on a strong investor market over 2010 to assist in a broad-based housing recovery through 2010. The investment lending figures bode poorly for this outcome and signal another year of skinny rental vacancies and upward pressure on rents.”

Mortgage Choice’s chief executive officer Michael Russell agreed investors would need to play a strong role in the housing recovery.

“We will obviously have to keep an eye on the figures that come out over the next couple of months, after rate rises have been factored in,” Mr Russell said.

“That aside, October’s ABS housing finance data strengthens the confidence we have of the Australian housing market recovery continuing well beyond the expiration of the First Home Owner Boost.”

 

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