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{{propApi.successMessage}} {{region}} Change locationInterest rate hikes hit home lending
Interest rate hikes hit home lending
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The ABS released the Lending to Households and Businesses data for July 2022 today. The data provides sobering statistics on housing finance commitments.
“The rise in the cost of borrowing is compounding the impact of the rapid increase in the cost of building a new home that occurred due to the constraints on global supply chains,” added Mr Devitt.
“Declines were seen across all segments of the market, led by investors.
“The value of loans to investors fell by 11.2 per cent to their weakest month in over a year. This was followed by a 9.5 per cent decline for first home buyers, to their lowest level in over two years, and a 6.3 per cent decline for other owner occupiers. There was also a 3.3 per cent decline in lending for renovations.
“These declines in home lending are consistent with other leading indicators.
“New home sales across Australia declined by 13.1 per cent in July, following even earlier reports from the industry of a slowing in the number of groups visiting display sites. This will see weaker sales volumes in the second half of 2022.
“If these trends are sustained, which is expected, then the 1.75 per cent increase in the cash rate so far will have brought this pandemic building boom to an end.
“There remains a significant volume of work under construction and approved-but-not-yet-commenced that will provide a buffer for the industry and ensure building activity and demand for skilled trades remains exceptionally strong through the rest of 2022 and into 2023.
“There is a risk that this volume of ongoing work will obscure the adverse impact of rising interest rates,” concluded Mr Devitt.
Housing Loans, by Market Segment, $M
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Home building materials prices still slower than CPI
“Home building materials have continued to experience only modest cost increases, up by 1.6 per cent in the 2024/25 financial year,” stated HIA Senior Economist, Maurice Tapang.
Productivity Commission backs HIA calls for major regulation overhaul
“Today’s interim report from the Productivity Commission overwhelmingly backs what HIA has long been saying - that the regulatory burden on businesses is getting worse in this country and there is need for a major overhaul on the approach to regulation,” said HIA Managing Director, Jocelyn Martin.
HIA welcomes key findings of interim Productivity Commission’s report
“The Housing Industry Association (HIA) welcomes the release of the Queensland Productivity Commission’s interim report into construction productivity It is a significant and necessary step toward overcoming the housing supply challenges facing Queensland,” said Michael Roberts, HIA Executive Director Queensland.
Building approvals pick up 2024/25
“New home building approvals in the 2024/25 financial year were up by 13.9 per cent compared to their 2023/24 trough,” stated HIA Senior Economist Tom Devitt.