“The number of owner occupier loans relating to new homes reached a 14-month high during October while investor participation in the market also stretched higher,” Shane Garrett, Chief Economist, Master Builders Australia said.
Today’s new set of figures from the ABS indicate that the number of loans to owner occupiers for new home building rose by 5.5 per cent during the month, with the number of loans for the purchase of new dwellings up by 1.3 per cent compared with September. Taken together, this means that the volume of loans relating to new homes has reached its highest level since August 2018.
“There is also solid evidence that confidence is returning to the investor side of the market with the value of lending on that side of the market up by 1.4 per cent during October. Having declined for 11 straight months since mid-2018, investor lending has turned around registering increase during four of the past five months,” Shane Garrett said.
“Based on recent results around building approvals, house prices and lending, it does seem that people are optimistic about the prospects for the housing market in 2020. Activity is going to get a further boost in January with the activation of NHFIC’s First Home Loan Deposit Scheme,” he said.
“Managed properly, the clear improvement in housing market sentiment could help re-ignite confidence amongst consumers more widely and across the business community. The absence of optimism amongst these players is one of the mainstumbling blocks for economic growth at the moment,” Shane Garrett said.
“The best way to build momentum is for the government to do everything it can to get new infrastructure projects rolling as early as possible. Building and construction projects are highly visible and represent the best way to signal to everyone that we are gearing up for a bright economic future,” Shane Garrett said.