New data has shown housing finance commitments for August have increased for the fourth consecutive month.
Australian Bureau of Statistics (ABS) housing finance figures for August 2011 show in trend terms, increases were recorded in all states and territories.
The number of loans for construction increased by 0.8 per cent on-month in August 2011, while loans for the purchase of a new dwelling were up by six per cent, yielding a 2.4 per cent rise overall in new home lending for the month.
“Considering new home starts fell in 2010/11 and look set for a further decline in 2011/12, it is encouraging to observe this bottoming out in a key leading indicator of new residential construction activity,” Housing Industry Association (HIA) chief economist Harley Dale said.
“There is a long way to go to turn around the new home building cycle and ensure a sustained recovery can begin making inroads into the substantial dwelling shortage Australia faces.”
The number of first home buyers, as a percentage of total owner occupied housing commitments, increased to 15.3 per cent in August compared to 14.9 per cent in July. This proportion is well below the long-run average of 20.1 per cent and dramatically down from the 28.5 per cent level of April 2009.
Following fourteen consecutive months of falls, the value of investment housing commitments increased by 0.6 per cent in August and follows a 0.5 per cent increase in July.
“The upturn in lending commitments reflects stability in interest rates and the housing market as well as increased competition among lenders,” the Real Estate Institute of Australia (REIA) acting President Pamela Bennet said.
“Whilst the continuing low levels of finance commitments to first home buyers remain a concern, the latest figures show that buyers are gradually returning to the market.”