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New home lending continues to grow in Australia

The amount being loaned for the building of new homes continues trending high.
The amount of money being loaned for the building of new homes in Australia is continuing to trend high, according to the Australian Bureau of Statistics.

It will come as good news for the property market, wherein a supply and demand imbalance has seen property prices rocket in the last few years to a level where many have suggested there is a danger of a property bubble.

According to the report, the number of loans being afforded for the building of new homes climbed by 0.9 per cent month on month in May, while they had risen by 3.1 per cent in the three months to May. 

"Construction loans, the principal component of new home lending, are at their highest level in over four years. New dwelling commencements are on track to hit their second highest level on record in 2014," said Harley Dale, chief economist at the Housing Industry Association.

The number of people taking out a loan to buy a newly built property also climbed in May, finishing 1.6 per cent ahead of April. 

Posted by Ravin Chatlani

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