New building recovery at risk

By webmaster 13 January 2011 | 1 minute read

Yesterday’s housing finance figures revealed an encouraging pick up in loans for new housing construction but the tenuous recovery remains at risk according to Master Builders Australia.

The number of loans for new housing construction rose by 2.7 per cent in November 2010, seasonally adjusted, Australian Bureau of Statistics figures showed.

“A solid increase in headline finance commitments in November confirms that the decline suffered in 2009-10 has been arrested, with finance related to new dwellings also on the improve,” commented Peter Jones, chief economist of the MBA.

“However, finance commitments remain at a low level and with the full impact of the latest rate rises hanging over it a fully-fledged recovery in residential building remains at risk.”

According to Mr Jones, the “interest rate senstitive” residential building industry remains in danger of becoming collateral damage as a result of “heavy handed” monetary policy.

“The weak underlying level of housing finance must be of concern to the federal government, as it prevents the residential building industry from meeting an undersupply of housing thereby risking higher rents and house prices as more people chase less stock.”



Risk is defined as the possibility of an investment having a different outcome from its expected gains or returns.

New building recovery at risk
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