Lending For New Owner Occupier Homes Rise In August

New ABS housing finance figures show that owner occupier lending for new housing increased in August, although the monthly level was still below a cyclical high which occurred midway through 2014, said the Housing Industry Association.

The number of loans (seasonally adjusted) to owner occupiers purchasing or constructing new homes increased by 2.5 per cent in August 2015 but was still 4.3 per cent lower than 12 months earlier and also 5.7 per cent lower than what appears to have been a peak in June 2014.

“New home lending to owner occupiers is below a cyclical high reached in mid-2014. However, more recent levels of monthly lending activity have remained healthy and this was also the case for August 2015,” said HIA economist Diwa Hopkins.

“Lending to investors seeking to construct housing fell away sharply during the month, following the all- time high reached in July.

“Investors have played a key role in the current new home building cycle, which has been a vital element of the broader economy as investment into other sectors continues to ebb. Regulators and lenders alike must be cognisant of this in the context of the APRA interventions in the residential lending environment.”

Compared with 12 months ago, the number of owner occupier loans for the construction or purchase of new dwellings increased in New South Wales (+11.0 per cent) and South Australia (+5.2 per cent). Lending declined in Victoria (-0.5 per cent), Queensland (-16.2 per cent), Western Australia (-11.5 per cent), Tasmania (-29.7 per cent), the Northern Territory (-17.9 per cent) and the Australian Capital Territory (-22.0 per cent).