
New home lending in Australia has shown signs of recovery in the first half of 2024, according to the latest data from the Australian Bureau of Statistics (ABS).
HIA Economist Maurice Tapang said, “Various segments of the housing market are increasingly active, with lending to first-home buyers, owner occupiers, and investors increasing in the first half of 2024.”
The number of loans issued for the purchase and construction of new homes increased by 9.2 per cent in the June quarter 2024 compared to the previous quarter.
Tapang noted, “Market confidence appears to be stabilising following nine months without a change in interest rates.”
The increase in lending was observed across all states, with Western Australia leading the way with a 53.2 per cent increase in the June quarter compared to the previous year.
First-home buyers are also returning to the market, with loans issued to this group increasing by 5.8 per cent in the June quarter compared to the March quarter.
Tapang suggested, “This increase in lending is partially driven by a return of first home buyers to the market.”
The ABS also released its Producer Price Index series for the June quarter 2024, showing a moderation in the cost of building materials.
“Following record high increases in the cost of building materials, the ABS has reported that price growth has returned to well-below the pre-pandemic rate,” Tapang said.
Prices of home building materials rose by 1.1 per cent in the year to June 2024, which is about half the rate of increase seen in the decade prior to the pandemic.
The positive trends in lending and moderation in building material costs suggest that the housing market may be approaching or at the trough of the current cycle.
However, South Australia was the only state to record a decline in lending for new homes, with a 1.3 per cent decrease in the June quarter 2024 compared to the same period last year.