While the number of new home loans slipped in May, economists are now warning the second half of 2012 will see numbers dip to GFC-level lows.
The Housing Industry Association (HIA) has released the data in conjunction with findings from the ABS. HIA’s chief economist Harley Dale said it was a “disappointing result.”
“It is evident that new home starts will bottom at GFC-equivalent levels this year, which is a very poor outcome for Australian businesses, households, and therefore the wider economy,” he said.
There was an overall dip of 2.4% in May, although it did show state-level growth across Queensland, South Australia and Tasmania.
Decline was recorded across NSW, Victoria and the Northern Territory, which lead the pack at an alarming 23.8% drop.
“We needed to be seeing a strong recovery in new home lending coming through in the first half of 2012 to signal a significant turnaround in residential construction from what will historically be a very low trough,” said Dale.
“That simply isn’t the case and government action in addition to lower borrowing costs is the combination required to restore healthy levels of confidence and activity.”