Don’t worry about decline in home construction loans

By |
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.”


Can you afford to buy in this suburb? Find out how much you can borrow

Top Suburbs : ferntree gully , cardiff south , windale , south brisbane , willoughby east

go back

Get help with your investment property

Do you need help finding the right loan for your investment?

When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.

Just fill in a few details below and we'll then arrange for a local Aussie Mortgage Broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus and appointment is free.

How soon would you like a mortgage?
What is your Annual Household Income i $
Do you currently own any Investment Properties?
Do you own your own residence?
How much equity do you have in all your current properties?
First Name
Last Name
Where do you live?
What number can we reach you on?
E-mail address
We value your privacy and treat all your information seriously - you can check out our privacy policy here