Yesterday’s housing finance data for December, released by the Australian Bureau of Statistics (ABS), contained a morsel of good news in that the number of finance commitments for new dwellings and construction increased by a seasonally-adjusted 1.5% over the month and was 8.1% higher over the year, to be tracking in line with the 5-year moving average (5YMA):
However, while the pick-up over the year is encouraging, finance commitments for new dwellings and construction were -1.9% below the level of September 2012, which was the month prior to the changes to first home buyer (FHB) incentives in New South Wales and Queensland aimed at boosting new home construction.
It’s too early to declare the FHB changes a failure, however, with New South Wales registering a solid pick-up in finance commitments for new dwellings and construction since the changes were implemented, whereas Queensland has experienced only very modest growth (see next chart).
It seems the main cause of the tepid recovery in new home finance is Victoria, where finance commitments have taken a big hit following the removal of the $13,000 First Home Bonus on newly constructed dwellings on 1 July 2012. There, the number of new dwelling and construction finance commitments have slumped by nearly -20% since the middle of last year, offsetting strong gains in Western Australia.
Overall, the data seems to confirm with the luke warm recovery taking place with respect to dwelling approvals and new home sales, which have shown only modest improvement from highly depressed levels.
unconventionaleconomist@hotmail.com
The data suggests the new home sales (loans approvals uplift) is for NSW Investors (see Westpac data on other thread).
A big fail for Big Ted for not axing the Vic FHBG on pre-existing homes.
REIV rent-seekers succeed in beggaring thy “Vic housing construction industry” neighbours.
Big Ted’s family is in the Real Estate Agency business (Baillieu Knight Frank). How dare you suggest that he betray his REIV brethren!!
Wow I wasn’t aware of that connection.
FHBG’s on second-hand dwellings are nothing but a gift to vendors, REA’s and (god-forbid) mortgage-brokers.
It is now widely recognised that they poke demand whilst throttling the already choked supply. Anyone who maintains that it improves affordability for FHBers is either deluded or a liar.
“deluded or a liar.”
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There is no shortage of deluded liar’s here!
Victoria has been the standout performer for new construction, which will help keep house prices in Victoria lower in future. WA has done ok but probably it hasn’t kept pace with demand, whilst the other states have generally lagged in recent years.
Lower future house prices relative to incomes should position Melbourne well for industry growth ahead of Sydney.
Future Corporates looking at where to locate will surely see the benefits of investing in a lower cost city than what Sydney continues to be.
Restriction on housing supply will be one of the largest inhibitors to long term growth in Sydney – although other than banking, tourist and service industries what else is there?
NYE fireworks, Mardi Gras and plenty of commercial property “For Lease” signs and any type of hand gun you want…