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Drop in new home lending

By Staff Reporter
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Loans for new home purchases slipped in August despite strong gains over the past year, new data from the ABS has shown.

The Housing Industry Association (HIA) said new home lending activity had seen a quick rise compared to August 2012, but had slowed in the last six months.

“Compared with 12 months ago, new home lending activity has increased markedly. However, growth has completely stalled over the past six months even though activity was already rather low by historical standards,” HIA senior economist Shane Garrett said.

According to Mr Garrett, 8,347 loans were advanced for the purchase and construction of new homes in August.

The data showed the number of housing finance commitments in August increased by around 2.2 per cent in NSW and Victoria, and by 0.1 per cent in Tasmania.

However, lending declined by 3.2 per cent in Queensland, 8.6 per cent in South Australia and 1.3 per cent in Western Australia over the same period. 

“The patchiness we are continuing to see in areas of the home loans market means that another interest rate cut from the RBA before the end of 2013 is important in order to ensure the market recovery fires on all cylinders,” Mr Garrett said.

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