Trouble coming your way, Gobbler:-When the HIA can't find...

Trouble coming your way, Gobbler:-

Lending figures highlight housing stress: HIA
Thursday 11 October 2007

The gap between new housing supply and demand is growing, along with an increase in existing house prices and rents, according to home lending data for August.

The total number of loans for owner occupiers increased by 1.6 percent in August to 64,365, a level 0.3 percent lower than a year earlier.

Lending for construction increased by 2.7 percent in August but the aggregate number of construction loans through the middle part of 2007 has not improved at all when compared to the same period last year.

HIA’s Chief Economist, Harley Dale, says the weakness in construction lending figures explains the price pressures in both the existing housing market and in rental markets.

"We saw evidence from the HIA-APM Land Monitor how plummeting land sales were putting the brakes on new residential construction," says Dale.

"Home lending figures show that lending for construction has failed to make a sustained recovery as high land prices and onerous fees, taxes, and charges drive an ever wider wedge between housing supply and demand."

Dale says an impending update on housing affordability for the September quarter will "almost certainly" show a further deterioration and set another record low.

"A recovery in new home building is a crucial requirement for the Australian economy but affordability is just so low that there is still no sign of a sustainable recovery emerging," says Dale.

"The established housing market is on the up and up again but the same cannot be said for new construction."

When the HIA can't find anything positive to say about the state of the market, you just know it's time to get nervous!