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Record Level of Lending for New Home Building in November 2020

“The number of loans for the construction of a new dwelling rose for the sixth consecutive month in November to reach a new record,” stated HIA’s Economist, Angela Lillicrap.

“This is the highest result for the second month in a row since the Australian Bureau of Statistics (ABS) began reporting this data in 2002.

“While HomeBuilder was the catalyst for improving consumer confidence in the housing market, the strength of housing finance data is also due to several factors including low interest rates.

“The number of construction loans to owner occupiers in the three months to November was 83.7 per cent higher than the same time last year.

“The number of loans for the purchase of land in the three months to November 2020 is also up by 99.2 per cent compared to the same period in 2019.

“HIA New Home Sales data suggests that detached housing finance approvals will continue to be strong over the coming months. The extension of HomeBuilder at the end of November is not a factor in this month’s result but will see the strength in housing finance data extend into 2021.

“Investors are returning to the market, with the value of lending to investors up by 3.7 per cent for the three months to November 2020 compared to the same time last year. This was driven by loans for the purchase of existing dwellings.

“It was also another very strong month for first home buyers. The number of loans to first home buyers reached the highest number since 2009, accounting for 42 per cent of the total number of owner occupier loans issued in November.

“It is evident in today’s data that HomeBuilder has been successful in boosting confidence in the market and creating work on the ground,” concluded Ms Lillicrap.

Across the states, the number of loans to owner-occupiers for the construction of a new dwelling in the three months to November 2020 compared to the same time last year increased the most in Western Australia (+144.4 per cent) followed by Queensland (+128.0 per cent) and the Northern Territory (+127.6 per cent). Victoria (+71.2 per cent), South Australia (+53.1per cent), Tasmania (+45.8 per cent) and New South Wales (+43.2 per cent) and also recorded strong results. The Australian Capital Territory recorded an increase of 28.9 per cent during this period.

Source: HIA

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