The latest ABS figures on housing finance have shown a sharp downturn in July, however according to the HIA “it’s not as bad as it looks”.
According to the Australian Bureau of Statistics, the number of dwelling commitments for owner occupied housing declined from June 2016 to July 2016 by 4.2 per cent (in seasonally adjusted terms) to 55,010.
Despite this, the Housing Industry Association emphasised: “The sharper than expected fall in July 2016 is not as bad as it looks.”
HIA chief economist Harley Dale commented: “While the number of loans for owner occupiers fell across the board in July 2016, the lending profile over the three months to July signals no cause for alarm.”
Mr Dale pointed out that lending for the purchase of new dwellings increased over the quarter by 2.2 per cent, while the number of loans to owner occupiers eased only moderately by 1.0 per cent.
He added that the number of loans for established dwellings (net of refinancing) fell by 2.0 per cent over the July quarter.
“This is hardly ‘shock, horror’ stuff, but these latest finance figures do reinforce that the overall market has peaked,” Mr Dale said.
Mr Dale also highlighted that the value of lending for investment in existing property continues to decline while lending for new property is up.
“It is rather ironic that without the policy uncertainty generated by proposed changes to superannuation and persistent headlines regarding negative gearing amendments, lending for existing investment properties would be lower and the counterpart new home building would be even healthier,” Mr Dale commented.
“That’s exactly what policy makers are after, yet their own actions are delaying that outcome and hampering housing affordability,” he said.