A slight increase in April will do little to change the weak profile for new home lending, the Housing Industry Association has claimed.
New ABS figures released yesterday found the number of loans for the construction or purchase of a new dwelling grew by 2.9 per cent in April.
HIA chief economist Harley Dale said while result was sound it still falls “well short of preventing a weak three month period, with loans down by 10 per cent over the quarter to April 2011”.
“A downward trend in new home lending has generally persisted since late 2009 and a range of leading housing indicators point to further weakness in new home building activity in the 2011/12 financial year,” Mr Dale said.
"That’s hardly a recipe for an up-beat non-resource sector economy.
“The threat of higher interest rates together with large supply side obstacles including the excessive cost of serviceable land is sending new home building activity lower and lower.
“The housing industry requires short term stimulus, it needs confidence that the COAG reform process is going to deliver tangible outcomes, and it deserves a fairer deal with greater access to finance than is currently being extended for residential development.”
Loans for the purchase of a new dwelling increased by 9 per cent in April 2011. But despite this lift, the number of loans still managed to fall by 18.6 per cent over the quarter.
Meanwhile, lending for construction posted a disappointing flat result in the month of April to be down by 6 per cent over the quarter.
In seasonally adjusted terms, the number loans for new housing in the month of April 2011 improved by 2.0 per cent in New South Wales and was up by 3.8 per cent in Victoria, 9.3 per cent in South Australia, 4.3 per cent in Western Australia, 13.3 per cent in Tasmania, 18.0 per cent in the Northern Territory, and 30.4 per cent in the Australian Capital Territory. Queensland was the exception to the broad-based monthly improvement where loans fell a further 5.7 per cent.