New home and apartment finance nods up by 50% on last year
FINANCE approvals for newly built homes and apartments rose more than 50% in the year to July, as signs of a housing recovery continue to emerge.
Data released by the Australian Bureau of Statistics on Monday showed a national upswing of 2.4% for finance approvals in July.
Westpac economist Matthew Hassan said the figures showed a "slightly better than expected gain", above what was a "consensus forecast" of only 2% growth.
And despite subdued activity for first home buyers in July, the ABS data was "broadly positive", Mr Hassan wrote.
Owner-occupier finance approvals rose another 2.7% in July, taking annual growth to 17% for the year ending July.
Despite a 2.1% fall in construction finance, approvals for the purchase of recently built homes (including off-the-plan apartments) was up 5.9% in July, or 52% for the year.
"More generally, the state split showed steady gains for NSW (+2.3%), Vic (+3.3%), SA (+1.8%) and WA (+1.9%) but a slight dip for Qld (-0.9%mth) which was coming off a couple of strong monthly rises," Mr Hassan wrote.
"All states are showing double-digit annual growth ranging from 10.8%yr in Vic to 18.9%yr in NSW and Qld."
Mr Hassan wrote that although the market expected a drag on approvals with flat first home buyer approvals, the broader picture was likely to show continued growth in coming months.
The home building sector also welcomed the news, with Housing Industry Association economist Geordan Murray labelling the July figures "the strongest monthly result since early 2010".
But Mr Murray said while it was a good result, there had been "a lack of strong upward momentum" during 2013.
"There has been strengthening demand from both owner occupiers and investors, which in itself is encouraging, but growth has been driven primarily by lending to those purchasing existing homes," he said.
Housing finance commitments by state, July 2013:
- NSW: up 2.3%
- Vic: up 3.3%
- Qld: down 0.9% (after two months growth)
- WA: up 1.8%
- Tas: up 1.9%
- NT: up 3.6%
- ACT: up 3.5%
SOURCE: ABS Housing Finance data.