Login
ISCOVER
A robust June quarter for new home lending is pointing to a recovery in dwelling starts over the second half of the year.
The number of loans to owner occupiers rose for the eighth straight month in June, by 1.1 per cent in seasonally adjusted terms, according to Australian Bureau of Statistics figures released yesterday.
To continue reading the rest of this article, please log in.
Looking for more benefits? Become a Premium Member.
Create free account to get unlimited news articles and more!
Looking for more benefits? Become a Premium Member.
Borrowing for home construction also increased, rising 2.8 per cent and outpacing the 1 per cent rise in loans written to buy established dwellings.
HIA Chief Economist Dr Harley Dale said the strong results for June were thanks to the positive impact of low mortgage rates and the government’s first home buyer stimulus.
“We expect to see a 15 per cent increase in housing starts by the end of 2009 as the first home buyer stimulus shows up in actual construction,” Mr Dale said.
“We saw a near doubling in the number of first home buyer loans in the June 2009 quarter when compared to a year earlier.
“Clearly the Federal stimulus to this segment of the market has been a key driver of the improvement in housing indicators and there has been a consistent increase in the proportion of first time buyers entering the new home market since the boost to the grant was introduced last October,” he said.
However, Westpac senior economist Andrew Hanlan is predicting lending to the first home buyer segment will ‘lose altitude’ from current elevated levels as the grants are wound back later this year.
Indeed, that may have already begun with the number of first home buyers as a percentage of all borrowers falling for the first time in eight months.
According to the ABS, lending to first home buyers fell to 27.1 per cent in June, from 28.5 per cent in May. The average loan size for first-home buyers shrank by $11,600 to $270,200 in the same period.
