Wednesday 11th May 2016 - 9:01 pm

Lending to property investors surges in March:HIA

by Alan Thornhill

Lending to property investors surged in March, according to the Housing Industry Association.

The HIA, which based its statement on figures released earlier by the Bureau of Statistics, said lending to investors who are building new housing, rose by 54.1 per cent during the month

“While total home lending edged marginally lower in March, lending to investors in the new housing market jumped by 54.1 per cent,” HIA economist, Diwa Hopkins said.

“This moderated the effect of declining lending that occurred in each of the other components of housing finance,” she added.

Total housing finance in March 2016 was worth some $32.74 billion, with lending to investors constructing new housing accounting for $1.83 billion of this total.

Lending to investors is heavily influenced by negative gearing and capital gains tax laws.

These have become contentious in the present election campaign, with the Turnbull government promising no changes if it is re-elected and Labor saying it would introduce new restrictions.

Ms Hopkins said the value of home lending fell by by 1.2 per cent in the March quarter to a level 3.7 per cent lower than in the March 2015 quarter.

“Today’s housing finance results add to a string of positive updates for the residential construction sector that indicate 2016 will represent another healthy year of activity,” she said.

She said, too, that the number of loans to owner occupiers constructing or purchasing new homes in the March 2016 quarter was higher than in the March 2015 quarter in five of the eight states and territories.

These were:- New South Wales (+7.6 per cent); Victoria (+3.7 per cent); South Australia (+12.7 per cent); the Northern Territory (+25.7 per cent) and; the Australian Capital Territory (+7.4 per cent).

Elsewhere, there were declines over this period: Queensland (-0.9 per cent); Western Australia (-23.5 per cent) and; Tasmania (-31.3 per cent), Ms Hopkins said.

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Alan Thornhill

Alan Thornhill is a parliamentary press gallery journalist.
Private Briefing is updated daily with Australian personal finance news, analysis, and commentary.

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