There was further growth in new home lending in the final quarter of the 2013/14 fiscal year, according to figures released by the Australian Bureau of Statistics.
Even though the growth in the final quarter was more modest, increasing by 1% to June 2014, the overall growth is a positive sign for the residential construction sector, says HIA Economist, Diwa Hopkins.
“Over the full 2013/14 fiscal year new home lending increased by 12.0%. With lending rates remaining very low, turnover in the established home market has risen, as have home prices. The residential construction industry has responded strongly to these signals,” Hopkins said.
The growth in new home lending has already shown signs of improving housing supply, and taking the pressure off housing affordability, according to Hopkins.
“In terms of new home lending being a leading indicator of residential building, today’s housing finance figures suggest home building activity should continue its strong recovery as we progress through the second half of the year.
“There are already signs that the improved supply of dwellings may have taken some of the heat out of price growth, with dwelling price growth decelerating in 2014,” Hopkins said.