New dwelling lending healthy, but expect to decline through to 2019

Looking at each state and territory, loans to owner-occupiers for construction or purchase of new dwellings over June have had the largest increase in Tasmania, at an increase of 38 per cent.

Following this is Queensland at 29.5 per cent, the Australian Capital Territory at 23.8 per cent, Western Australia at 7.9 per cent, the Northern Territory at 7.8 per cent, NSW at 5.8 per cent, South Australia at 4.6 per cent and Victoria at 3.5 per cent.

“New dwelling starts reached an all-time record high during 2016, with activity likely to see a modest reduction over the remaining years of this decade.

“The lending figures out today support HIA’s forecasts for a relatively modest correction in new home building.”

Despite the recorded growth, Mr Garrett went on to say that he and the HIA expect new home starts to decline during the next two years by approximately 24 per cent, bottoming out at about 175,000 starts per year.

Regardless, Mr Garrett believes this is “still a very healthy level of activity”.

During this decline, apartments are predicted to face the most significant reduction in building activity due to restrictions on foreign investors, which Mr Garrett said would be “depriving rental markets of sufficient supply”.

Tags:

• Latest

Share