In the latest sign of subdued residential building conditions, new data shows finance commitments for the construction of new homes remains flat.
According to the Australian Bureau of Statistics, a total of 4,758 loans (seasonally adjusted) for construction of new homes (owner occupation) were made in September – down 0.25% from August. The dollar value of these loans edged up 0.79% to come in at $1.277 billion.
Compared with a year ago, the number of loans approved for new home construction is down by 1.1%.
Master Builders Association Chief Executive Peter Jones says that the latest figures indicate continued weakness in housing and the need for further rate cuts.
“The figures pre-date last week’s rate cut and show a housing market attempting to find a floor but with consumer caution and overseas events working against a recovery” Jones says.
“Last week’s rate cut will help but Master Builders believes the Reserve Bank needs to do more to boost confidence and encourage an upswing in housing.”
In an interesting paradox, data for the purchase of new dwellings remains strong. Both the number and value of loans approved for new home purchases was higher in August and September than for any other month so far this year.
The new figures come on top weak new home sales and approval figures. On a seasonally adjusted basis, the number of new homes sold in Australia was down 14% over the September quarter, according to the most recent data from Housing Industry Association. The latest approval data from the ABS shows a 13.6% fall in seasonally adjusted approvals – more than reversing a 10.7% rise in August.