Construction loans continue to break records

The Housing Industry Association (HIA) has hailed the success of the federal government’s HomeBuilder stimulus after loans for construction rose for their seventh consecutive month to the highest levels on record:

“Confidence in the housing market has been improving since the announcement of HomeBuilder in June 2020…

“The number of construction loans to owner occupiers in the three months to January 2021 is 45.8 per cent higher than the previous quarter and is more than double the same time the previous year.

The HIA is right to be giddy with new home finance dwarfing the post-GFC boom when the federal government double the first home buyers grant for newly built dwellings:

An unprecedented home construction boom is taking place at the same time as household formation has collapsed amid the closing of Australia’s international border to immigration.

This raises the obvious issue of whether Australia is faces an oversupply of homes in 2022, alongside a crash in new home construction?

Thus, expect the housing industry to ramp-up lobbying to reboot mass immigration, alongside calls to extend housing subsides.

Unconventional Economist

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