Home building in 2018 may prove stronger than expected

Home building in 2018 may prove stronger than expected

Home building activity towards the end of 2017 indicates that while the housing cycle may have passed its peak, 2018 could still be stronger than expected, according to the Housing Industry Association (HIA).

HIA senior economist, Geordan Murray, described the most recent home building figures from the Australian Bureau of Statistics (ABS) as indicative that the residential building market held up throughout the latter half of 2017, despite some concerns about softening.

Dwelling starts (September 2017 quarter)

State/Territory Change from June quarter 2017 Change from September quarter 2016
NSW -8.2% -13.5%
VIC 17.1% 19.6%
QLD -5.9% -23.9%
SA 0.2% 25.7%
WA -6.3% -14.9%
TAS -0.7% 9%
NT 67.4% 69.7%
ACT 67.4% 101.2%

According to HIA, the ABS figures found that new unit starts increased by 0.7% during the September 2017 quarter, though this was 3.3% down on the level recorded the same time the previous year. Activity also increased in the multi-unit sector by 5.3%, and while detached house starts declined by 3.4%, they remain at relatively healthy levels according to the HIA.

Housing finance (November 2017)

State/Territory Change from November 2016 Change from November quarter 2016 to November quarter 2017
NSW 13.7% 19.1%
VIC 16.8% 19%
QLD 5.8% 0.3%
SA 10.4% 6.6%
WA -7.6% 2.2%
TAS 10% 7.5%
NT -25.5% -5.5%
ACT 51.5% 58.1%

Home lending stats were found to have also recorded growth at the end of 2017. According to the HIA, lending for new homes grew by 2.2% from October-November 2017, while the total number of loans during the three months to November 2017 was 12.4% higher than at the same time the past year.  

“Looking to leading indicators of future activity, recent building approvals data and the housing finance figures released today continue to show that demand for new homes remained resilient throughout the final quarter of 2017 which implies that new home building activity should remain at relatively high levels throughout early 2018.” 

“Despite the strong end to 2017 there is little doubt that the housing cycle has passed the peak. But with strong levels of population growth, a strengthening labour market and interest rates predicted to remain at historically low levels for some time yet, 2018 could still be stronger than many analysts expect.” – Geordan Murray 

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Also known as a construction home loan, a building in course of erection (BICOE) loan loan allows you to draw down funds as a building project advances in order to pay the builders. This option is available on selected variable rate loans.

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Yes, ANZ, Commonwealth Bank, NAB and Westpac all offer guarantor home loans. These mortgages are also offered by many other banks, credit unions and building societies.

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Real Time Ratings™ was conceived by a team of data experts who have been analysing trends and behaviour in the home loan market for more than a decade. It was designed purely to meet the evolving needs of home loan customers who wish to merge low cost with flexible features quickly. We believe it fills a glaring gap in the market by frequently re-rating loan products based on the changes lenders make daily.

Real Time Ratings™ is a new idea and will change over time to match the frequently-evolving demands of the market. Some things won’t change though – it will always rate all relevent products in our database and will not be influenced by advertising.

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Whether you’re a new borrower or you’re refinancing your home loan, many lenders require you to be in a permanent job with the same employer for at least 6 months before applying for a home loan. Different lenders have different requirements. 

If your work situation changes for any reason while you’re applying for a mortgage, this could reduce your chances of successfully completing the process. Contacting the lender as soon as you know your employment situation is changing may allow you to work something out. 

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Cost is calculated by looking at the interest rates and fees over the first five years of the loan.

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