Building and property lobbies have talked down concern over a downturn in residential construction – a key driver of economic growth – despite the latest figures revealing a decline in the number of loans for the construction of new homes.

Data released by the Australian Bureau of Statistics yesterday reported that loans for the construction of new owner-occupier homes dropped 2.6% in November, after rising 1.5% in October (seasonally adjusted).

This has raised some concern over the broader state of the economy, prompting speculation that the Reserve Bank may further cut interest rates in its February board meeting.

However, Master Builders of Australia chief economist Peter Jones said the November data doesn’t represent any downwards trend.

“Despite the fall back in November, housing finance loans for construction of owner occupied dwellings looks set to enjoy continued solid growth as a strong positive trend remains entrenched on the back of low interest rates.”

Jones said that, in original terms, the number of loans for construction of owner occupied dwellings in the last three months combined is 12% higher than in the corresponding three months a year ago.

“The trend figures indicate loans for owner occupied construction growing at around 10% on an annual basis, with investment loans for construction running even more strongly at around 20%.”

The Property Council of Australia agreed, saying forward indicators show that the residential construction industry is set for a resilient 2015.

And Residential Development Council executive director Nick Proud said the housing finance numbers follow on from last week’s record release of building approvals figures for November 2014, which signalled a strong year of residential development activity to come.

“Pipeline indicators for new homes which includes housing finance, building approvals and commencements remains positive, and [yesterday’s] housing finance show potential capacity to tackle affordability in 2015.”