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Construction dwindles as HomeBuilder ends
While detached dwelling construction continued to rise in April, the overall number of loans for new homes has fallen, official figures show.
Construction dwindles as HomeBuilder ends
While detached dwelling construction continued to rise in April, the overall number of loans for new homes has fallen, official figures show.
New data from the Australia Bureau of Statistics has revealed that the number of loans being taken out for construction of new homes has fallen for the second consecutive month.
This latest dip of 11.4 per cent follows a fall of 14.8 per cent in March.
ABS head of finance and wealth Katherine Keenan observed that “these were the first monthly declines since the HomeBuilder grant was introduced in June 2020”.
Applications for the government’s HomeBuilder scheme closed in April.
“However,” she noted, “the value of construction commitments remained at a high level.”
Commenting on the findings, HIA economist Angela Lillicrap said this is the first ABS data to show “that we are past the peak in the surge in construction due to HomeBuilder”.
“The cooling in construction loans is consistent across all the states and territories,” she said.
Ms Lillicrap noted that first home buyer activity has also eased back from its elevated levels, with a decline of 1.9 per cent in April.
“Until recently, first home buyers have been the driving force in the market as they took advantage of low interest rates and various government incentives.”
Despite these headwinds, Ms Lillicrap said that “lending for renovations continues to be strong”.
“The value of loans for alterations and additions is up by 66.7 per cent in the three months to April 2021 compared to the same time last year,” she said.
According to her, one of the biggest factors driving this growth is Australia’s closed borders.
“Households have diverted funds that would have typically been spent on overseas travel into buying a new home or improving their existing one,” she said.
Commenting on the findings, Minister for Housing Michael Sukkar said, “This near-record set of numbers is further proof that the Morrison government’s plan for housing is working and underpinning Australia’s economic recovery.”
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