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{{propApi.successMessage}} {{region}} Change locationHousing downturn accelerates
Housing downturn accelerates
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The ABS released the Lending to Households and Businesses data for January 2023 today.
“There were just 4,345 loans issued for the construction or purchase of a new home in January, the weakest month since November 2008, and 8.2 per cent down on the previous month,” added Mr Devitt.
“Owner occupiers and investors, alike, continue to retreat from the market. First home buyers, especially, were issued fewer loans in January 2023 than in any month in the last six years.
“Even lending for renovations – the part of the sector expected to hold up relatively well during this downturn – had its weakest month in almost two years.
“The data continues to reflect the weight of interest rate increases which occurred in 2022, and before the RBA increased the rate again in February, with the promise of more rate increases to come.
“There are significant lags evident in this cycle and we are unlikely to see the bottom in this data until the second half of the year, at the earliest.
“The higher cash rate is compounding the adverse impact of the rising cost of materials, labour and land as well as the increased costs of compliance with the building code.
“There remains a large volume of work underway that will be completed in 2023 and this will keep national unemployment exceptionally low until early 2024.
“By continuing to raise rates the RBA risks a longer and deeper slowdown in economic growth than is necessary,” concluded Mr Devitt.
The number of loans for the construction or purchase of new homes declined in most jurisdictions in January 2023 compared to the previous month, led by South Australia (-37.6 per cent), and followed by New South Wales (-37.2 per cent), Victoria (-32.4 per cent), Queensland (-25.1 per cent), Western Australia (-23.6 per cent) and Tasmania (-1.4 per cent). Increases were seen in the Northern Territory (+47.6 per cent) and the Australian Capital Territory (+24.0 per cent).
Lending for Purchase and Construction of a New Home
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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.