New homes in Australia had a patchy start to 2013, with lending remaining relatively subdued in January, according to ABS Housing Finance figures.
Nonetheless, the Housing Industry Association has an optimistic outlook for the coming 12 months:
"Across the country, the aggregate number of loans to owner occupiers for the construction and purchase of new homes rose only 0.6 per cent in the month of January 2013. It would have been a touch optimistic to expect the interest rate cuts late in 2012 to have an immediate impact, but we expect the effects of this to emerge over the coming months," said HIA Economist, Geordan Murray.
"While we didn't see a material improvement in number of loans for new homes in January 2013, activity over the month was still 9.3 per cent higher than we saw in January 2012. From this perspective, we have started the year in a better position than we did in 2012."
"If we consider the total value of lending for housing, there was an increase of 2.4 per cent during the month of January 2013," added Murray. "After contracting in the months of November and December 2012 it is pleasing to see lending regain some of the lost ground."
In terms of the value of lending to owner occupiers, lending for the construction and purchase of new homes declined by 1.1 per cent in January 2013 while lending for the purchase of established homes increased by 2.3 per cent. The value of lending for investment in the construction of new homes for rent or resale increased by 38.1 per cent in January 2013 after the subdued level of activity recorded in December 2012. The value of lending for investment in established homes for rent or resale increased by 2.5 per cent over January 2013.
For the three months to January of 2013 the seasonally adjusted number of loans for the construction and purchase of new homes by owner occupiers increased by 1.6 per cent in New South Wales, 8.4 per cent in South Australia, and by 5.3 per cent in Western Australia. The number of loans declined by 12.0 per cent in Victoria, 1.0 per cent in Queensland, and 14.6 per cent in Tasmania.
Murray concludes: "The improvement in January was primarily driven by improved lending activity for established homes which was evident across both owner occupiers and investors. Investors also showed a renewed appetite for new homes after sitting on the sideline for the last two months."
