Home lending for new and existing dwellings fell in November under the weight of a second consecutive interest rate rise and the waning of the boost to first time buyers, according to the Housing Industry Association.
HIA chief economist, Dr Harley Dale, said that loans for the construction of new dwellings fell for the first time in 2009 in November, down by 6.5 per cent, while loans for the purchase of new dwellings dropped for a third straight month, falling by 5.1 per cent.
“While new home lending was still higher over the three months to November 2009, we are clearly losing some steam as the amount of upgrade buyer activity fails to completely offset the waning of first home buyers. Growth in the number of first home buyer loans peaked in mid 2009 while the proportion of first home buyer loans now sits at 22.1 per cent, the lowest post the boost and well down on the peak of 28.5 per cent,” Dale said.
“We will see an increase in new home starts this year… However, the magnitude of the recovery will fall substantially short of what is required to match the demands of Australia’s burgeoning population,” he said.
The total number of seasonally adjusted loans for owner occupiers (net of refinancing) dropped by 6.2 per cent in the month of November 2009, to the lowest level since February, with falls evident across every state and territory.
Peter Jones, Master Builders’ chief economist, said: “The investment-driven side of the housing market is still being affected by a lack of project finance due to the credit crunch, with construction for rent or resale little changed over the year.”
