Today’s housing finance data from the ABS showed that loans for new construction have collapsed from the HomeBuilder-induced peak.
As shown in the next chart, there were only 4,144 loans for construction in July 2022, down 58% from the record 9,767 construction loans handed out in January 2021:
Construction loans crash back to earth.
Loans for the purchase of new homes also fell to 1,948 in July, down 35% from the March 2021 peak of 3,003 loans.
Much like the first home buyer grants for new home purchases in 2008, the HomeBuilder stimulus pulled forward buyer demand. This demand has now evaporated amid soaring mortgage rates.
However, because the pipeline of houses under construction has swelled to all-time highs on the back of rising costs and supply constraints:
Record house construction pipeline.
Actual construction levels will remain high for the foreseeable future.
The downturn will probably arrive mid next year once the homes currently under construction are finally completed.
