Strong building activity has been forecast for the next three years after new data showed surging growth in the property market.
The Australian Bureau of Statistics has reported there were $28.6 million of housing finance commitments in July. That marked an 18.2 per cent increase on the previous year.
The owner-occupied share of those finance commitments rose 10.7 per cent to $17.1 million, while the investor share jumped 31 per cent to $11.5 million.
However, the number of finance commitments only reached 52,251, which was just 0.1 per cent higher than the year before.
That included 43,223 commitments for the purchase of established homes – down 1.3 per cent.
New home commitments also fell 8.3 per cent to 2,871, while home building commitments rose 16.9 per cent to 6,157.
First home buyers represented 12.2 per cent of owner-occupier finance commitments, compared to 14.7 per cent 12 months earlier. Their average loan size climbed 7.0 per cent to $307,400.
Master Builders Australia chief economist Peter Jones said there is a significant undersupply of new housing, which should ensure demand remains solid while interest rates stay low.
“Trend growth in overall commitments for construction of new dwellings has weakened, particularly in NSW and Queensland after a strong growth phase,” he said.
“But the strong level of housing finance commitments will mean that building activity will remain strong over the next three years.”
Mortgage Choice spokesperson Jessica Darnbrough said the Australian property market is performing incredibly well, despite fluctuations between capital cities.
“The property market is proving attractive to buyers at present, with home loan approvals now hovering around all-time highs,” she said.
“Moving forward, with interest rates still at all-time lows, the property market should remain popular with Australians, which should result in strong demand for home loans.”