Weak month for new home loans
Loans for new homes edged down slightly in October.
Figures from the Australian Bureau of Statistics show new home loans fell 0.4% for the month of October, to sit 2.4% lower than the previous year. The contraction was driven by a 0.8% decline in the number of loans for new home construction, while the volume of loans for the purchase of a new home rose 0.3%.
Housing Industry Association (HIA) senior economist Shane Garrett said a “record pipeline” of high density dwellings reaching settlement in the short-term should keep lending for new home purchases at an elevated level.
“HIA expects that an orderly reduction in new dwelling commencements will become evident during 2017, particularly on the apartment side of the market. Accordingly, the volume of new home loans is only likely to start easing back towards the end of next year,” Garrett said.
Not all states and territories saw a contraction in new lending. The number of loans for construction and purchase of new homes was up 18.2% year-on-year in Tasmania. The ACT and Queensland saw similarly strong rises, up 12.7% and 11.2%, respectively. The number of loans also rose in South Australia, up 2.1%.
There were sharp declines, however, in other states and territories. Western Australia saw a 24.4% year-on-year decline, while new loans fell 17.6% in the Northern Territory. New South Wales saw loans fall 9.1%, and new loans in Victoria were down 3.8%.