New home build loans drop to their lowest ever level in February
New home construction lending activity fell to a record low in February, exacerbating Australia’s housing crisis at a time when builders are moreNew loans for owner occupiers to build a home fell 4.8 per cent in February – the month of the Reserve Bank of Australia’s ninth consecutive interest-rate hike – to 2732 in seasonally adjusted terms, the lowest in Australian Bureau of Statistics records that go back to 2002.
New home construction, which the government desperately wants to lift to ease the country’s chronic housing shortage, had already been on the decline because of rising interest rates and building material costs.of new home supply not keeping pace with soaring population growth. There are hopeful signs, however. February’s 0.9 per cent decline in new home loan commitments across all borrower types was less than economists’ expectations for a 1.8 per cent contraction.
The imbalance between housing supply and demand is worsening. Separate figures from the government’s National Housing Finance and Investment Corporation published on MondayWeaker than ever: Loan commitments for new home builds fell to their lowest number ever in February.Australia’s home-building sector is likely to remain weak until borrowing costs stabilise. Economists are divided over whether the Reserve Bank will keep its official cash rate at 3.
“Most signs point towards a protracted downturn for dwelling approvals that will extend through 2023 and into 2024,” Ms Kilroy said.
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