ABS figures released yesterday showed there was an increase in the number of new home loans for the three consecutive months to November 2010
In November 2010 the number of loans for construction increased by 2.7 per cent while loans for the purchase of new homes increased by 9.7 per cent.
However the leading industry bodies remain mindful of wider economic impacts.
The Housing Industry Association chief economist, Dr Harley Dale, said: “It is encouraging to see a bottoming out in new home lending over September — November 2010, although we remain mindful that the full impact of last November’s rate hikes is yet to emerge.
“A period of interest rate stability this year would certainly enhance the prospects of a slow recovery in new housing confidence. However, the lagged impact of interest rate rises and on-going credit constraints will generate a weaker level of new home building in 2011, meaning only two years in a decade when residential construction has risen.
“The withdrawal of monetary and fiscal policy stimulus has laid bare the challenges policy makers face in reducing the considerable supply side obstacles to new housing,” said Dale.
Master Builders Australia chief economist Peter Jones commented: "A solid increase in headline finance commitments in November confirms that the decline suffered in 2009-10 has been arrested, with finance related to new dwellings also on the improve."
"However, finance commitments remain at a low level and with the full impact of the latest rate rises hanging over it a fully-fledged recovery in residential building remains at risk.
"Still suffering from an ongoing lack of finance, the interest rate sensitive residential building industry remains in danger of becoming collateral damage as a result of heavy-handed Reserve Bank monetary policy."
“The weak underlying level of housing finance must be of concern to the Federal Government, as it prevents the residential building industry from meeting an undersupply of housing thereby risking higher rents and house prices as more people chase less stock."
For the HIA, Dale added that the 2011 the release of the Federal Government’s population policy, the summit on taxation, and hoped for progress in the slow COAG reform process all provide opportunities to create an environment where a sustained increase in new home building can emerge.
“Until this situation occurs, Australia’s dwelling shortage will continue to increase, disadvantaging households seeking to build a new home or rent a dwelling,” added Dale.
In seasonally adjusted terms, in November 2010 the total number of owner occupier loans increased by 3.3 per cent in New South Wales and was up by 2.2 per cent in Victoria, 1.6 per cent in Queensland, 2.3 per cent in South Australia, 2.2 per cent in Western Australia, 7.4 per cent in the Northern Territory, and 3.7 per cent in the Australian Capital Territory.
