Record lending finance points to sustained construction growth

Home Media Releases Record lending finance points to sustained construction growth

Record lending finance points to sustained construction growthAustralia’s new home construction market has never been stronger according to the latest ABS Lending Finance figures released today, which show this growth is set to continue in 2015 and beyond.Lending finance for the construction and purchase of new dwellings increased by 12.6 per cent, mirroring similar growth in the other key indicators of building activity (up 12.4 per cent for the last quarter of 2014 on the same quarter in 2013) and building approvals, which jumped 12.6 per cent to 201,025 last year, the highest on record.A 9 per cent increase in Lending Finance for the construction and purchase of new dwellings was recorded for the month of December in seasonally adjusted terms.The Property Council of Australia’s Executive Director Residential, Nick Proud, said if there was any doubt as to the growth prospects for the property and construction industry, today’s figures prove conclusively that it is going from strength to strength .”Lending Finance for the purchase and construction of new dwellings over the whole of 2014 recorded a double digit increase, which will see residential development activity remain at peak levels throughout at least the 2015-16 financial year,” said Mr Proud.”The recent decision by the Reserve Bank of Australia to cut the official interest rate will likely drive these lending finance figures higher still eclipsing the current record levels.”No other sector in Australia’s economy is demonstrating such robust and sustained growth.”This is welcome news in the context of a decade-long high in unemployment and a slowing rate of economy-wide growth.”Maintaining a high level of new construction is also critical to ensuring we have enough new homes being built to meet demand and, by extension, preserve affordability.”It is more important than ever for governments to tackle the much-needed reforms to sustain the current levels of growth in development activity and underpin the economy in the long term.”We simply can’t afford to see growth stall in this key sector of Australia’s economy: the ramifications on employment, housing affordability and government revenue would be extremely concerning.”Investment lending finance for the purposes of renting and resale improved over the course of 2014 leading to a high water mark in the number of homes being built.”Today’s ABS Lending Finance numbers provide lag indicators to last week’s record release of building approvals figures for December2014, but both provide strong signs of residential development activity remaining strong in the coming period.”Concentrated and targeted national reform in 2015 of supply side efficiencies in land release, development assessment and reform of inefficient taxes such as stamp duty is urgently needed if we are to continue to create prosperity, jobs and strong communities.” Media contact: Fiona Benson, Head of Media and Communications: 0407 294 620