Widespread growth in new home lending

REMARKABLY, all eight state and territories experienced growth in owner occupier loans for new dwellings during June 2017.

The number of loans for new homes made to owner occupiers rose by 3.6 per cent during June 2017 –the fourth month in a row to see expansion, says HIA’s senior economist Shane Garrett.

“New dwelling starts reached an all-time record high during 2016 with activity likely to see a modest reduction over the remaining years of this decade,” Mr Garrett said.

“The lending figures out today support HIA’s forecasts for a relatively modest correction in new home building.

“Overall, we anticipate that new home starts will decline over the next two years by about 24% from their peak by 2019 with activity bottoming out at around 175,000 starts per year – still a very healthy level of activity.”

The apartment side of the market is likely to see the largest reduction in building activity.

“This is partly the result of heavier restrictions on foreign investor participation in the market which risk depriving rental markets of sufficient supply,” he said.

Compared with a year ago, the number of loans to owner occupiers for the construction or purchase of new dwellings increased in all eight states and territories during June 2017.