Housing finance figures provide more positive outlook
Housing finance figures released today by the Australian Bureau of Statistics are another step in the right direction for an industry experiencing a prolonged period of downturn.
Finance for construction of new dwellings increased 4.9 per cent and finance for the purchase of new dwellings increased 9.7 per cent in June, seasonally adjusted.
Chief Economist for Master Builders Australia, Peter Jones said the figures were a positive sign for the industry, but they need to continue and accelerate over the coming months.
“There has been a welcome improvement in finance for the purchase and construction of new dwellings. With incentives for new home buyers to take effect in New South Wales later in the year, there could finally be a light at the end of the tunnel for housing.
“While the figures are positive, the industry remains in a very fragile state in the short term. Today’s figures are of little comfort for builders who remain in survival mode.
“The industry is certainly not out of the woods just yet. A sustained recovery is likely to be several months away and coming from a very low base.
“The financial outlook in Europe remains uncertain, which plays heavily on consumer confidence. Further drops in consumer confidence would have a dramatic effect on building industry and undo the improvements seen in June’s figures.
“Today’s figures are positive, but the Reserve Bank should not rule out further rate cuts if more improvements aren’t made in the sector,” Mr Jones concluded.