Glimmer of hope for builders as loans for new houses ticks up

I recently read an interesting article on the Master Builders Australia website - there is hope for the construction industry in sight!

Loans for ‘new’ dwellings moved higher in September in contrast to a further decline in loans for the purchase of established dwellings, according to peak building and construction industry organisation Master Builders Australia.

Mr Peter Jones, Master Builders’ Chief Economist, said “The steep decline in overall housing finance commitments over the past 12 months lends support to the Reserve Bank’s aggressive moves to bring down interest rates down by a full two percentage points in the past three months. “With the likelihood of more cuts to come over the next six months, the bold decision to bring rates sharply down coupled with additional government spending should bolster confidence and should put a floor under the market.”

“Encouragingly, the number of loans for ‘new’ dwellings moved higher in the month, following 12 consecutive monthly declines.”He said “A further period of uncertainty is likely over the remainder of the year as the full extent of the global financial crisis plays out and this means soft conditions in the housing market can be expected to prevail for another 6 to 9 months.” The total number of dwellings financed for owner occupiers, seasonally adjusted, fell by 2.7 per cent in September 2008, to be down 26.9 per cent on the same month last year.

The number of loans for ‘new’ dwellings (construction and new combined) was up by 2.4 per cent in September to be down 26.8 per cent on the same month last year.- the number of loans for the construction of dwellings rose by 2.0 per cent in September, to be 17.4 per cent down on the same month last year. - the number of loans for the purchase of new dwellings rose by 3.6 per cent in September, to be down 42.3 per cent on the same time last year.

The number of loans for the purchase of established dwellings fell by 3.3 per cent in September, to be down 27.0 per cent on the same time last year. The value of lending to finance the purchase of investment housing fell by 1.1 per cent in September, to be down 22.8 per cent on a year ago.