Home loan volumes ‘elevated by historic standards’

The latest Australian Bureau of Statistics report showed that home lending saw overall growth of 4.0 per cent during the month of April.

Housing Industry Association senior economist Shane Garrett said the figures confirm demand for new home purchases remains strong.

Mr Garrett pointed out that although new home lending in April was 5.9 per cent lower than its peak a year earlier, current loan volumes remain “elevated by historic standards”.

“This means that activity on the ground over the remainder of 2016 will be healthy,” he said.

“May’s interest rate reduction is likely to provide some impetus to new home lending over the coming months,” he added.

The number of loans to owner-occupiers constructing or purchasing new homes increased in four of the eight states and territories during April.

The ACT reported an increase of 30.0 per cent, followed by South Australia with an increase of 9.7 per cent, Victoria with 4.5 per cent and New South Wales 1.1 per cent.

The number of loans declined in the same period in Western Australia by 18.9 per cent, in Tasmania by 15.2 per cent, in Queensland by 2.2 per cent and the Northern Territory which reported a drop of 1.8 per cent.

[Related: Home loan demand plummets for owner occupiers]