The Housing Industry Association (HIA) gave an apt summary of today’s ABS housing finance data in the title of its media release Home lending up but not by enough. The Queensland data (see my chart below) are consistent with building approvals data (see this previous post) that suggest a very slow recovery for our building industry.
It is interesting that the proportion of new loans for the purchase of new dwellings, as distinct from the construction of dwellings, is increasing. Could this be because costs imposed by regulations (e.g. around environmental sustainability or heritage protection) are making building new houses in established areas even more unaffordable, leaving many people little choice but to buy more affordable houses in new estates on the urban fringe? The HIA certainly thinks regulation, along with taxation (stamp duty, I assume), is constraining housing construction. The media release notes:
“…residential investment in construction continues to languish near decade lows, a pointer to the disincentive to new home building attributable to excessive tax and regulatory costs,” warned HIA Senior Economist, Shane Garrett.
Given the very slow recovery in housing construction, our Councils and Governments need to have a serious look at the impact of their regulations and taxes on the sector.
On today’s housing finance data, KS at Loose Change notes there have been some widely varying interpretations:
As usual, MacroBusiness has good coverage of the data: