Loans to investors were behind the 2.7% increase in the value of new home loans issued in July, according to the latest housing finance data
from the Australian Bureau of Statistics.
The data revealed that the value of investor loans surged 6.8% from June, while the value of owner-occupier loans remained flat. Investors now make up 40% of the total value of home loans being issued, which is the second highest level on record.
The number of loans to investors for purchasing or constructing new homes also led the way, with investment lending for new construction in the three months to July up 10.5% on the same period last year. For owner-occupiers, this figure was 8.8%.
The Housing Industry Association said the result is an encouraging sign for new home building.
“Today’s figures show that current credit conditions are having the desired impact on residential construction, with both investors and owner occupiers taking advantage of the favourable conditions to add to Australia’s stock of housing, which will aid housing affordability across the spectrum of the housing market,” HIA Economist, Diwa Hopkins said.
Although, in order to maintain this encouraging trend, Hopkins said housing-specific policy reform is crucial.
“Policy makers at all levels of government must be acting and coordinating to address existing barriers to further growth in the new housing stock – excessive taxation as well zoning and approvals delays are primary examples. These impediments need be addressed in order for new home building to gather a further leg of recovery in 2015,” she said.