Australia's new housing pipeline is starting to build back up after a slow 2005. The major indicator of the housing industry's health shows that the strong end to last year continued through to December with loans for new dwellings, established dwellings and investment properties all recording increases.
For the country's new home builders, loans for brand new homes broke through the 7000 barrier for the first time in over two years, up 2.2% over the month to 7019.
The resurgence in the established property market also continued with 52,084 loans for established dwellings recorded over the month, also a recent high.
The Housing Industry Association (HIA) said this is encouraging news given that flattening prices, stable rates and pent up housing demand all point to the start of a slow but sustainable recovery.
HIA's Executive Director of Housing and Economics, Mr Simon Tennent, said the figures are akin to a home lending "full house" with four out of four key leading indicators for Australia's housing industry undergoing what appears to be a sustainable recovery.
"Firstly, established real estate volumes are creeping up which is important for new home construction as many who have had difficulty selling to trade up into a new home are now seeing more buyers in the market," Mr Tennent said.
"Secondly the rise in new home loans will translate into home building in the first half of this year while the pressure on the rental market may well begin to ease with a solid $5.96 billion worth of investment property purchased over the month," he added.
"The fourth encouraging number is the rise again in first buyers as a proportion of the total market, up to 18.7% of all buyers."
"While a handful of swallows rarely make a summer, early reports of increasing land sales volumes, particularly in the difficult New South Wales market will come as a great relief to those in that state who have been hit hardest by the slowdown. It is also pleasing that while the industry has turned the corner, there is virtually no pressure to lift interest rates in response thanks to stable building costs and house prices," Mr Tennent said.
On a state-by-state basis, Victoria, Western Australia and New South Wales all recorded increases in owner-occupied lending (new and existing homes), up 3.6, 3.5 and 1.7% respectively. Falls however were recorded over the month in the Northern Territory, down 5.1%, the ACT down 3.6%, Queensland, down 3.4%, Tasmania, down 2.9% and South Australia, down 2.3%.
