New lending activity eased in July, new data has revealed.
According to the latest data from the Australian Bureau of Statistics, the total number of seasonally adjusted loans fell by 2.7 per cent in New South Wales and 1.3 per cent in Victoria.
Queensland suffered a 2.0 per cent fall, while South Australia, Tasmania and the Australian Capital Territory suffered falls of 1.0 per cent, 3.0 per cent in Tasmania, and 2.8 per cent respectively.
“Following a reasonable improvement in June, the number of loans for the construction or purchase of new homes slipped back again in July,” the Housing Industry Association’s chief economist Harley Dale said.
“We have seen weaker updates for all new housing leading indicators released for 2012/13 to date.
“The starting position for new home building is GFC-like levels, the negative implications of which are reverberating through not only the new home building sector, but parts of manufacturing and retail as well.”
Mr Dale said it is now imperative that the economy see evidence of improvement in leading indicators such as new home lending and local government building approvals, to provide some hope that conditions will lift sooner rather than later.
“The evidence isn’t there and that has to be a prominent concern for policy makers,” he said.
“In terms of total owner occupier lending, the moderate recovery in the first home buyer market continues, but is exaggerated because of the low base, and the trade-up buyer market appears to be losing momentum.
"On the investment front, what was the barest of recoveries has petered out. At a time of considerable shortage in affordable rental accommodation it is concerning that new residential investment has effectively tracked sideways, at a historically low level, for over six months now.”