Boost in new home lending

Despite ongoing threats of oversupply in some capital cities, a rise in buyer confidence prompted by the cash rate cut has seen finance for new builds continue to grow.

The June 2016 ABS housing finance figures show that finance for new dwellings and first home buyers remains at positive levels.

“The latest data supports the market view that new home buyers remain confident and that this will be further boosted by the recent interest rate cut,” CEO of Master Builders Australia Wilhelm Harnisch said.

“The number of housing loans for construction of new dwellings rose by 2.1 per cent and the number to purchase new homes rose by 2.7 per cent,” he said.

“Pleasingly, the number of loans to first home buyers held up well at 14.3 per cent of total finance approved.”

According to Mr Harnisch, first home buyer confidence will also be boosted by the recent rate cut.

“The relatively high number of housing loans will translate into higher levels of approvals and, in due course new housing activity in the next few months,” he said.

“This will ensure that the residential building sector remains a ray of sunshine in the economy, particularly in providing jobs.”

[Related: Home lending increasingly competitive, says RBA]

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Francesca Krakue

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