Media Release
11 October 2010
MIXED SIGNALS FROM
HOUSING FINANCE FIGURES
Statement by Peter Jones, Chief Economist
A second consecutive increase in housing finance commitments in August masks a divergence –
loans for established dwellings show signs of recovery but loans for new building have yet to pick
up, according to peak building and construction organisation Master Builders Australia.
Mr Peter Jones, Master Builders’ Chief Economist, said
“A
second leg to
the residential building
recovery is by no means guaranteed as finance for the construction of,
and purchase
of,
new
dwellings struggles to overcome the hangover from the end of Government stimulus programs, the
lingering effects of the credit squeeze and tighter monetary policy.”
He said, “Critical for the housing market will be a further period of interest rate stability to engender
confidence and encourage upgraders, investors and first home buyers alike.”
“A solid pipeline of new building work lies ahead, but Australia requires a major phase of residential
building to make up for previous weak activity and
to cater for the
housing needs of the
population.”
“Although finance commitments for the building or purchase of new dwellings remain up on the low
point in late 2008, loans now need to kick up again following 10 months of correction.”
“Despite some improvement in recent times, the investment-driven side of the new housing market
is still struggling to overcome the credit crunch and is constraining the upswing.”
“Master Builders urges the Reserve Bank to keep interest rates on hold for an extended period to
ensure that recovery in the interest
rate-sensitive residential building sector can regain
momentum.”
Master Builders believes
that housing supply side issues and
affordability need to be
seriously
addressed in the new Parliament.
Total number of dwellings financed for owner occupiers, seasonally adjusted, rose
by 1
per cent in August, to be down 22.8 per cent on July last year.
Number of loans for ‘new’ dwellings (construction/purchase of new dwellings combined)
fell by 1.3 per cent in August, to be down 25.2 per cent on the same month last year:
-
the number of loans for the construction of dwellings fell by 1 per cent in August, to be
down 27.9 per cent on the same month last year;
-
the number of loans for the purchase of new dwellings fell by 2 per cent in August, to be
down 18.7 per cent on the same time last year.
The number of loans for the purchase of established dwellings
rose
by 1.4
per cent
in
August, to be down 22.4 per cent on the same time last year.
The value of lending to finance the purchase of investment housing fell by 3.9 per cent in
August, to be down 4 per cent on a year ago
-
the value of lending to finance construction of dwellings for rent or resale rose by 25.6
per cent, to be up 47.1 per cent on a year ago.
For further information contact:
Peter Jones, Chief Economist, Mobile 0403 440 838
NEWS 
