Another rise in housing finance in November reflects a pick up in loans for the purchase of established dwellings and masks ongoing weakness in loans for construction of new dwellings, according to Master Builders Australia.
Master Builders chief economist Peter Jones said: “The key finance indicator released today by the ABS shows that demand for new dwellings remains flat, despite indications of a pick up in commitments for the purchase of established dwellings.
Jones said: “Loans for construction of dwellings and purchase of new dwellings, combined, were marginally up in November but remain well down on the same month a year ago.
He said, “The housing market is beginning to pick itself off the floor but the number of finance commitments remain weak by historical standards as consumer caution and Euro turmoil work against the upswing.
“The two recent rate cuts in November and December will help, but Master Builders believes the Reserve Bank still needs to do more to boost confidence and encourage a recovery in residential building.
“A sustained recovery in housing investment is critical because the residential market is underbuilding and undersupplied with the Government’s own Housing Supply Council estimating the shortfall in new housing at around 180,000 dwellings.”
