New data shows home loan demand remains strong, but building activity in the housing market is approaching a peak, a building association says.
Rising rates don't deter loan seekers
Home loan demand remains strong, with new data showing the total number of dwelling commitments approved rose 0.9% over November.
54,603 home loans were written throughout the month of November, up from 54,096 loans written the month prior, according to the latest data from the Australian Bureau of Statistics
“The last time we saw more than 54,500 home loans approved in one month was back in July 2016,” Mortgage Choice chief executive officer John Flavell said.
“This data would suggest the threat of higher interest rates is doing little to stifle home loan demand.”
Throughout the course of November, the number of loans approved for the construction of dwellings, as well as the purchase of new and established dwellings, all increased.
“As per the data, there was a 2.3% jump in the number of loans approved for the construction of dwellings. Meanwhile the number of loans approved for the purchase of new and established dwellings increased by 3.3% and 0.6% respectively,” Flavell said.
But Master Builders Australia’s National Manager Housing Matthew Pollock said the figures indicate that building activity in Australia’s housing market is approaching a peak.
“However, that peak is unlikely to come before the end of the financial year and the current pipeline of work is set to support one of the best years for home building activity in Australia’s history in 2017,” he said.
“That leaves the possibility for a softer landing later down the track, with housing finance commitments and building approvals data likely to show emerging signs of weakness during the first half of 2017.
"But managed well, and combined with an expectation for high and sustained population growth, the housing market will continue to be a pillar of Australian economic prosperity and jobs growth over the long term, with 2017 shaping up to be a particularly strong year for new home building activity,” Pollock said.
Home loan demand remains strong, with new data showing the total number of dwelling commitments approved rose 0.9% over November.
54,603 home loans were written throughout the month of November, up from 54,096 loans written the month prior, according to the latest data from the Australian Bureau of Statistics
“The last time we saw more than 54,500 home loans approved in one month was back in July 2016,” Mortgage Choice chief executive officer John Flavell said.
“This data would suggest the threat of higher interest rates is doing little to stifle home loan demand.”
Throughout the course of November, the number of loans approved for the construction of dwellings, as well as the purchase of new and established dwellings, all increased.
“As per the data, there was a 2.3% jump in the number of loans approved for the construction of dwellings. Meanwhile the number of loans approved for the purchase of new and established dwellings increased by 3.3% and 0.6% respectively,” Flavell said.
But Master Builders Australia’s National Manager Housing Matthew Pollock said the figures indicate that building activity in Australia’s housing market is approaching a peak.
“However, that peak is unlikely to come before the end of the financial year and the current pipeline of work is set to support one of the best years for home building activity in Australia’s history in 2017,” he said.
“That leaves the possibility for a softer landing later down the track, with housing finance commitments and building approvals data likely to show emerging signs of weakness during the first half of 2017.
"But managed well, and combined with an expectation for high and sustained population growth, the housing market will continue to be a pillar of Australian economic prosperity and jobs growth over the long term, with 2017 shaping up to be a particularly strong year for new home building activity,” Pollock said.
