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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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Keep SMSF finance flowing to new homes while evidence is assessed
“The Housing Industry Association supports allowing self-managed superannuation funds to continue using Limited Recourse Borrowing Arrangements to finance the construction of new homes while the impact of the Government’s prohibition is properly assessed,” said HIA Chief Economist, Tim Reardon.
Tackling the building site crime wave
The Housing Industry Association (HIA) has received reports from members regarding an increase in theft at building sites, particularly within new residential developments. While copper theft has been an ongoing concern for some time, recent incidents indicate that offenders are targeting more than just cabling.
Proposed new deposit and progress payment requirements for home building contracts
The Victorian government has commenced a consultation process on draft regulations and released a regulatory impact statement on the proposed new deposit and progress payment requirements for home building contracts.
Builders reject Apprentice Employer Licensing proposal
The Housing Industry Association (HIA) is calling on the Victorian Government to withdraw its proposal to require employers to obtain a licence before engaging apprentices, warning the scheme will add red tape, increase costs and reduce apprenticeship opportunities at a time of severe skills shortages.