Economic forecasters believe the outlook for residential home building is now “very weak”, after data showed new home lending was down in June.
According to the Australian Bureau of Statistics, the number of loans for the construction or purchase of a new dwelling fell by 0.4 per cent in June and 13.7 per cent in the six months to July 2011.
“New home lending is a leading indicator of residential building activity so unfortunately the current low number of loans reinforces HIA’s view that dwelling starts will fall by at least 14 per cent in calendar year 2011,” HIA’s senior economist Andrew Harvey said.
“This low level of residential building activity is not only a negative for the Australian economy, but is not sustainable in a market which already poses major home affordability challenges, particularly for first-time buyers.”
Loans for the purchase of a new dwelling rose by 0.7 per cent in June 2011, but the rise was insufficient to offset the 0.8 per cent fall in lending for the construction of new homes.
In seasonally adjusted terms, the number of loans for new housing in the month of June 2011 increased by 22.5 per cent in the Northern Territory, 7.3 per cent in South Australia, 5.7 per cent in the ACT and 1.6 per cent in Queensland. Loan numbers fell by 12.1 per cent in Tasmania, 3.0 per cent in Western Australia and 2.0 per cent in New South Wales.