High demand for loans to construct and purchase new dwellings is set to drive a recovery to the residential sector, industry groups say.
The number of loans to construct new dwellings rose by 1.3 per cent in April, marking a 26.6 per cent increase since the same time last year. The number of loans to purchase new dwellings is also up 38.4 per cent since April 2008.
The figures are welcome news to the industry, with experts pointing to a recovery in residential construction as housing finance picks up.
“Residential building is well positioned to help insulate Australia during the downturn and … ignite a recovery in the broader economy,” Master Builders Australia’s (MBA) chief economist, Peter Jones, said.
New home lending figures, together with a range of other housing indicators, point to a rise in the number of new housing starts from the June 2009 quarter, Housing Industry Association (HIA) chief economist Harley Dale said.
First home buyer activity is a key feature in the strength of housing finance, Dale said, with the number of loans for first home buyers up by 70 per cent since April 2008.
While the outlook is looking good for the residential sector, there is little sign of improvement in loans to build investment housing, which has dropped by 7.5 per cent since last year.
“Lending figures for the construction of new rental dwellings continue to head in the wrong direction suggesting a number of investors are still sitting on the sidelines,” Dale said.
Despite the trend, the HIA is forecasting a 15 per cent increase in housing starts by 2009 December quarter.
