Maroc - TIMBERBIZ.COM.AU - A La Une - 12/Jul 00:34

Ongoing weakness in the home market

Lending for new home purchase and construction decreased by 3.3% in May. There were 4693 loans issued for the purchase and construction of new homes in the month of May in seasonally adjusted terms. Source: Timberbiz “This leaves the three-month period to May 2024 with 13,988 loans for new homes, which is 7.9% higher than in the previous quarterly period,” HIA Senior Economist Matt King said. “Lending for new homes in the most recent three-month period to May 2024 is up by 8.8% compared to the same time in the previous year. “Lending for new homes remains around the lowest levels observed since interest rates began rising, and well below the 20-year average. “This continued weak result in new home lending does not bode well for the supply and delivery of new homes to market in short to medium term,” he said. There were 66,818 loans issued for the purchase of established homes in the three months to May 2024 (in seasonally adjusted terms). “This is up by 6.1% compared to the same quarter in the previous year. Over the last year, lending for established homes has remained stable compared to new home lending,” Mr King said. Lending to first home buyers continued to remain soft in the face of historic affordability constraints. The number of loans issued to first home buyers was down 3.3% in May but was up 7.4% in the three-month period to May 2024. “All categories of home lending point to ongoing weakness in the new home market,” Mr King said. “Only 172,725 dwellings were completed in the calendar year 2023. With annual demand for housing sitting above 227,000 homes a year, and a resulting shortfall more than 50,000 homes a year, this will add further strain to historically high dwelling prices and rents across the country.” In original terms, the total number of loans issued in the three months to May 2024 for the construction or purchase of new homes rose in Western Australia by 49.0% compared to the previous year. This was followed by Queensland (+13.9%), Tasmania (+10.8%), and New South Wales (+4.6%). The other jurisdictions recorded a decline in lending for new homes, led by the Australian Capital Territory (-22.3%), followed by the Northern Territory (-13.1%), Victoria (-2.3%), and South Australia (-1.7%).