Home lending has seen a slight improvement, but the housing industry is calling for more RBA cuts to lift the sector off the floor.
March ABS figures show lending for owner-occupied new homes rose 3.5%, driven by a 13.3% increase in the number of loans for the purchase of a new home. Loans for the construction of new homes remained fairly flat, rising only 0.2%.
Housing Industry Association senior economist Andrew Harvey said the numbers were encouraging, as the rise came even before the Reserve Bank's May cut. He predicted that the 50bp cash rate reduction would further boost housing finance, but said more needed to be done.
"While the 50bp rate cut was the correct call, more is needed in terms of further rate cuts and also housing supply reform by the state and Federal governments. We need to keep in mind that new home lending figures show that there are around 2,000 fewer loans each month than there would have been if the longer-term pre-GFC trends in housing finance had continued," Harvey said.