New housing demand cooling
Demand for new homes from owner occupiers continued to cool in August according to the Australian Bureau for Statistics which released figures today showing that the total number of loans for new home building eased by 12.6 percent. Total housing finance fell by -0.7 percent on the previous month.
The Housing Industry Association says the slowing is consistent with current industry reports that demand has eased from the highs of earlier in the year but still remains at a healthy, sustainable level.
Ruth Morschel, HIA’s executive director of Public Affairs and Policy, says that the moderate slowing in new home finance is a far better indicator of activity than other volatile measures and confirms that the homebuilding industry is still on track for a soft landing into 2003.
“Unlike other peaks in new home building, the fundamentals remain strong,” Morschel says. “Low inflation, low interest rates, low unemployment, modest economic growth and competitively priced new homes will sustain industry activity into next year.
“Alarmist reports over the alleged housing bubble are disappointing as they not only damage new home buyer confidence but fail to acknowledge the diverse and complex nature of Australia’s housing stock.
“The reality is that most of the overbuilding risks are heavily weighted in the higher density capital city apartment sector - a market estimated to be 10 percent of the housing stock. The long lead times in getting large blocks of units approved and the longer construction times, sometimes up to two years, suggests that the risks for this sector are not as big as some suspect.
“For the remaining 90 percent of the housing stock, strong population growth and household formation will ensure that the industry undergoes a modest correction over this financial year.”
Source: Building Products News.
11-Oct-2002