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$vuetify.icons.faPhone1300 650 620

Construction loans remain elevated in August

Media release

Construction loans remain elevated in August

Media release

“The number of loans for the construction of a new dwelling fell by 4.9 per cent in August but remains elevated compared to pre-COVID levels,” stated HIA Economist, Tom Devitt.

The ABS released the Lending to Households and Businesses data for August 2021 today. The publication presents statistics on housing finance commitments including for the purchase or construction of new dwellings.

“The number of loans for the construction of new homes has continued its decline since the end of HomeBuilder in March,” added Mr Devitt.

“Despite these declines, the number of loans still remains up by 51.0 per cent in the three months to August 2021 compared to the same period two years ago.

“This will ensure a solid pipeline of home building work and associated employment well into the second half of 2022.

“First home buyer activity has also remained elevated and they now account for 35 per cent of the market. This remains above the average of the last decade as they take advantage of record low interest rates.

“Investor activity is also returning to long term trends with lending to investors rising by 1.5 per cent in August. Investors now account for almost one-third of the value of loans issued. This remains well below the peaks seen pre-COVID when macro-prudential restrictions were introduced.

“Lending for home renovations however, remains exceptionally high. The value of loans issued for renovations in the past three months is 122.7 per cent higher than the same period last year. This has been driven by record household savings and structural shifts as we spend more time at home,” concluded Mr Devitt.

Across the states, the number of loans to owner-occupiers for the construction of a new dwelling in the three months to August 2021 compared to the same time last year has increased in almost all jurisdictions:

- South Australia by +69.6 per cent

- The Australian Capital Territory by +61.3 per cent

- Western Australia by +48.0 per cent

- Tasmania by +44.2 per cent

- New South Wales by +27.8 per cent

- Victoria by +27.5 per cent

- Queensland by +20.0 per cent

- The Northern Territory is down by 48.0 per cent.

 

For further information please contact:

Tom Devitt, Economist                      0439 514 656

Tim Reardon, Chief Economist         0423 141 031 

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