Today’s housing finance data for April suggested that buyer demand for newly constructed dwellings remains strong.
Despite registering a 1.2% seasonally-adjusted fall in the number of finance commitments for new dwellings (i.e. construction plus new), buyer demand remains elevated, tracking some 14% above the 5-year moving average level (5YMA), with the current ‘boom’ also appearing more enduring than the post-GFC episode, even if it has not reached the same heights (see below charts):
The news is equally good when measured on a rolling annual basis, with the number of finance commitments for new homes and construction rising by 13% over the year (see next chart).
Looking at at the state-by-state breakdown, which is presented below on a rolling annual basis since it is not seasonally adjusted, shows that the lift in new home finance has been driven by New South Wales and Western Australia, with Queensland and South Australia in a weaker uptrend. That said, New South Wales is beginning to show signs of topping-out, whereas Victorian new home finance has shown some improvement recently, but remains more or less range-bound (see next chart).
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