There was a rise in housing finance in September but loans for construction of dwellings and purchase of new dwellings fell, according to new ABS figures.
The total value of dwelling commitments excluding alterations and additions rose by about one per cent in the month of September 2011.
However, Master Builders chief economist Peter Jones noted: "The key finance indicator released today by the ABS shows that demand for new dwellings remains flat, despite a rise in the headline figure.
"Loans for construction of dwellings and purchase of new dwellings, combined, fell in September and remain down on the same month a year ago.
"The figures pre-date last week's rate cut and show a housing market attempting to find a floor but with consumer caution and overseas events working against a recovery.
The HIA acting chief economist, Andrew Harvey, said that following a solid increase in the month of August, new home lending fell by a modest amount in September.
“Hopefully [the] fall in the number of loans for the construction or purchase of new homes is merely a blip in an overall trajectory of a return to growth in new home lending,” he said.
He added that “once we see the positive impact of the Melbourne Cup day rate cut flow though we should see lending begin to gain ground.
“Moreover, if the RBA fires up with a second rate cut in December, or at latest early 2012, which is warranted given domestic and global economic conditions, then the prospect of a return to decent levels of new home building is good,” said Harvey.
The number of loans for construction fell by 0.2 per cent in September 2011, while loans for the purchase of a new dwelling were down by 0.7 per cent, yielding a 0.4 per cent fall in new home lending for the month.
Meanwhile, the number of loans for established dwellings, net of refinancing, edged up by a sizeable 2.6 per cent in September.
