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The ABS released the Lending to Households and Businesses data for January 2024 today, which provides statistics on housing finance commitments.
“Lending for new homes was at record lows in 2023, and this downward trend continued into the new year,” added Mr Reardon.
“This leaves the number of loans for new dwellings down by 8.7 per cent in the three months to January 2024 compared to the previous year.
“This is consistent with other leading indicators of home building activity, such as new home sales and building approvals which continue to show a slowdown in 2024.
“The RBA’s rate hiking cycle caused consumer confidence to decline and home buying activity to consequently fall.
“The decline in lending is not consistent across jurisdictions, with the slowdown most evident in New South Wales and Victoria, due to the higher cost of delivering a new home in these markets.
“It now takes 2.5 average incomes to service a typical mortgage in Sydney.
“Western Australia, on the other hand, is continuing to show signs that it is out of sync with the rest of the economy. This sees new home lending in Western Australia up by 23.2 per cent compared to the previous year. Strong income growth, employment growth and relatively more affordable homes are offsetting the adverse impact of the rise in the cash rate," concluded Mr Reardon.
In original terms, the total number of loans issued for the construction or purchase of new homes increased in South Australia (+1.9 per cent) and in Western Australia (+23.2 per cent) compared to the previous year. The other jurisdictions saw declines in new home lending, led by Tasmania (-40.3 per cent), followed by the Australian Capital Territory (-36.6 per cent), the Northern Territory (-26.9 per cent), New South Wales (-23.7 per cent), Victoria (-10.6 per cent) and Queensland (-3.3 per cent).
“Australia’s population reached 27.4 million by the end of 2024, up by 445,900 people, or 1.7 per cent for the year,” stated HIA Senior Economist, Tom Devitt.
The Tasmanian election that no-one wanted to have is in full swing, and while the limited campaign period is unlikely to provide the usual platform to promote key policies and reforms, HIA is calling on both major parties to prioritise housing policies given the significant challenges across the state.
“Our dated and complex planning system is littered with speed bumps that could easily be removed”, said Brad Armitage, HIA NSW Executive Director.
“The Victorian government’s proposal to update home building contract laws to make them fit for use in the 21st century is welcomed by HIA,” stated HIA Executive Director, Keith Ryan.