Home buyers ‘tentatively’ return to market

“[This shows] that home buyers were tentatively returning to the market in June in response to the initial easing of COVID-19-related restrictions and the announcement of the HomeBuilder program,” commented HIA senior economist Geordan Murray.

“Evidence of improved market confidence and the HomeBuilder program is starting to emerge. The first movers were quick off the mark to secure available blocks of land. The number of loans to owner-occupiers purchasing residential land jumped 33.8 per cent in June.

That being said, Mr Murray noted that improvement in lending to those purchasing established dwellings was not replicated in lending for construction of new homes.

“The figures tracking loans for construction are yet to reflect the pick-up in demand for new homes that has occurred since the HomeBuilder program was announced. In June, the number of construction loans actually dropped to the lowest monthly level since 2012,” he said. 

“The surge in lending for land purchases highlights a risk that the availability of residential lots where on-site work can begin within the time frame of the HomeBuilder package could limit take-up under the program.

“All states and territories are now receiving applications and we expect to see a material lift in the number of construction loans in the months ahead as the HomeBuilder program gains traction.”