Figures for March show an increase in activity in the Australian domestic property market, as lending for new homes rose across nearly all categories.
According to the Housing Industry Association, the voice of the country’s residential building industry, the positive moves confirm that the market is gaining strength after a challenging period.
Lending for the purchase of existing homes rose by nearly 6% in March from the levels in the previous month, representing a 6.2% year on year increase for the quarter.
The total number of seasonally adjusted loans for owner occupiers saw increases for New South Wales, South Australia and Victoria, and Tasmania by 8%, 5.3% and 4.3% respectively.
The only location where the total number of loans fell was in the Northern Territory, where a drop of 1.7% was recorded.
The latest figures are from the Australian Bureau of Statistics and show that lending increased across nearly all categories, with both loans for construction and the purchase of new homes up more than 10% compared with the previous month.
HIA senior economist, Shane Garrett, said; “The latest housing lending figures point to a strengthening of this measure of market activity. Lending increased across nearly all categories, with the loans for construction and purchase of new dwelling up over 10% in the month. On an annual basis, this represents an increase of over 20%, a very welcome lift in activity.
“Looking at lending to investors, finance for established dwellings has been rising fairly consistently with the value of loans increasing by 6.2% over the three months to March 2013, for example,” Garrett explained.
“However, investor lending into new dwellings fell sharply by 16.4% in the March 2013 quarter, although the overall profile appears to have followed a path of improvement since the middle of 2012,” he concluded.
Potential interest rate reductions may stimulate the market for both owner occupiers and overseas investors.
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