Positives from Housing Industry Australia
RECENT data from the ABS and insights from HIA economist Maurice Tapang reveal an uptick in the Australian housing market. Lending for the purchase and construction of new homes has been on the rise since early 2024, reflecting a 9.2per cent increase in the June quarter compared to the previous quarter. This growth is widespread across all states, signalling a broad-based recovery in the housing sector.
The resurgence in lending is partly attributed to the return of first-home buyers, with loans issued to this group rising by 5.8 per cent in the June quarter relative to March. This rebound suggests that building activity might be stabilising or is at, or near, the trough in the cycle.
Market confidence seems to be stabilising, after nine months without changes in interest rates. This stable interest rate environment has likely contributed to the increased lending activity.
On the cost front, the ABS reports a significant slowdown in the growth of building material prices. In the year to June 2024, prices rose by just 1.1 per cent, a stark contrast to the rapid increases seen before the pandemic. This easing in material costs could help alleviate some financial pressures within the housing market.
Regionally, Western Australia has experienced the most dramatic increase in lending for new homes, up 53.2 per cent in the June quarter compared to the previous year. Other states also saw gains, with Northern Territory and Queensland rising by 20.9 per cent and 17.1 per cent, respectively. In contrast, South Australia saw a decline of 1.3 per cent. Overall, these trends indicate a recovering and increasingly active housing market.
