A lift in home lending in May points to a “green shoot” in home building, according to the Housing Industry Association (HIA).
Data from the ABS Housing Finance report, released yesterday, showed the number of loans for new dwellings had risen for the ninth consecutive month and pointed to a modest recovery for residential construction.
“New home lending figures are in contrast to the surprise negative building approval figures for May and show that the housing sector continues to be buoyed by the first home buyers grant and low interest rates,” HIA senior economist Ben Phillips said.
The total number of seasonally adjusted loans for owner-occupiers (excluding refinancing) increased by 2.2 per cent in the month of May 2009 to a level 23.5 per cent higher than in May last year.
There was an 8 per cent increase in loans for construction while lending for established dwellings (net of refinancing) was up by 2.7 per cent.
“Most pleasing was a return of investors for the construction of new rental dwellings which grew by 83.7 per cent over May,” Mr Phillips said.
HIA is forecasting a 15 per cent increase in housing starts by the December quarter, following a trough reached in the March quarter.