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The ABS released the Lending to Households and Businesses data for April 2022 today. The data provides statistics on housing finance commitments.
“While loans for new homes declined by 5.9 per cent in April 2022, this still leaves the month up by 10.7 per cent on its 2019 counterpart. Lending for the last three months is also up by 15.2 per cent compared to 2019,” added Mr Devitt.
“Lending to all segments of the market – first home buyers, other owner occupiers, and investors – remains well above their pre-pandemic levels.
“Lending for renovations, in particular, is sitting at almost three times pre-pandemic levels.
“At the end of 2021, there were 75.7 per cent more detached homes under construction than pre-COVID. There are also more homes approved and waiting commencement than in any previous cycle.
“Together with similar new home building and renovations booms in other developed economies, this has placed significant demands on the international supply of building materials, along with local supplies of land and labour. The result has been ongoing increases in the cost of home building.
“These factors will sustain Australia’s elevated number of homes and renovations under construction and keep Australia’s already-stretched home builders busy until at least June 2023.
“They will also delay the adverse impact of rising rates on the industry, and therefore the wider economy.
“An acute rental shortage and deterioration in affordability has also seen strengthening in demand for multi-units, including high rise apartments. On top of this, there are early signs of a return of overseas migrants, who tend to favour higher density living more than existing residents.
“With detached home building and renovations activity remaining at capacity for at least another year and demand for multi-units returning, the shortage of building materials and labour will continue to be the main pinch point for the industry.
"A slow return of overseas migration is easing the adverse impact of a loss of workers from Australia’s two largest states,” stated Tim Reardon, HIA’s Chief Economist.
The Victorian Government has announced a further lifting of COVID-19 restrictions in relation to vaccination requirements.
The Certificate of Occupancy requirements for Class 1 buildings were suspended on 16 December 2021 to run until 30 June 2022.
This infosheet provides an overview of what cost plus contracts are, how they are used and how to avoid common issues. HIA has a Tasmania Cost Plus Contract for sale available for purchase through Contracts Online.