New home loans remain steady

The total value of mortgages for new dwellings was $3.7 billion in August 2016, a fall of 4 per cent over the month, and adding to three consecutive months of negative growth.  Mortgage lending for new dwellings is now at its lowest level since September 2015.

“Despite a slight fall in value, the number of new housing commitments increased by 2.4 per cent in August 2016, with 8,285 mortgages taken out to finance either the construction or purchase of new dwellings,” Wilhelm Harnisch, CEO of Master Builders Australia said.

“Over the month, owner occupied loans for new dwellings fell by 1.6 per cent. But overall, owner occupiers continue to account for the greatest share of home loans, with approximately two in every three mortgages taken out by owner occupiers over the month,” he said.

“Due to a fall in new housing approvals recorded earlier in the month, there is a growing concern by industry that supply constraints may be limiting opportunities for new dwelling construction,” Wilhelm Harnisch said.

“First home buyers share of home loans continued to improve, edging up to 13.4%, on the back of a marginal improvement in the number of dwellings financed – 3.5% over the month – and growth in the average value of first homer buyer loans to $318,300 – up by 0.6% on July 2016,” he said.

“The falling share of home loans for new dwelling commitments, and a recent fall in residential building approvals recorded earlier in the month suggests new dwelling construction is easing, and needs to hold up to meet growing demand and assist with housing affordability,” Wilhelm Harnisch said.