Loans for the construction or purchase of new dwellings rose in May, giving a much needed boost to Australia’s chronic housing shortage.
New data from the Australian Bureau of Statistics shows new home lending rose 5.7 per cent in May, following a 3.3 per cent increase in April.
“Hopefully new home lending is finally dragging itself off the canvas, although we need much more than today’s improvement to lift us from what is a chronically low level of new home lending,” Housing Industry Association senior economist Andrew Harvey said.
“Unfortunately, back in January new home lending shifted down yet another gear in what now looks to be a ‘double-dip’ in home financing activity. New home lending in the first five months of 2011 is down by 15.7 per cent on the same five months in 2010 as the interest rate hike of November last year buffeted the confidence of potential home buyers.”
Loans for the purchase of a new dwelling increased by 4.6 per cent in May 2011, but the rise was insufficient to prevent a drop of five per cent over the May quarter.
Meanwhile, lending for construction posted an encouraging 6.2 per cent increase in the month of May to be down by 1.1 per cent over the May quarter.
In seasonally adjusted terms, the number loans for new housing in the month of May 2011 increased by 6.0 per cent in New South Wales, 3.9 per cent in Queensland, 5.3 per cent in Victoria, 5.4 per cent in South Australia and by 10.0 per cent in Western Australia. Loan numbers fell by 2.7 per cent in Tasmania, 6.1 per cent in the NT and by 7.5 per cent in the ACT.