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Residential land demand highest in two years

The impact of HomeBuilder is finally beginning to be represented by statistics, with housing finance figures released today by Housing Industry Association showing a surge in lending for land purchases.

Lending for construction rose in July for the first time since the pandemic hit, reaching the highest level in two years.

“Not only does this data show that there has been an increase in the number of loans for the construction of a new home, there was also an increase in the purchase of new and established homes,” HIA’s Chief Economist, Tim Reardon stated.

“There has been a tangible improvement in sentiment and confidence in the housing market.

“Most significant, today’s data shows that there has been a 30 per cent increase in the number of loans issued for the purchase of residential land for the second month in a row.

“Finance approvals for the purchase of a block of land are now 69.9 per cent higher than in the same month last year.

The surge in demand was experienced across all states.

The largest increase in loans for residential land occurred in Queensland, with a rise of 145.1 per cent compared to July, 2019. This was followed by WA (+110 per cent), SA (+105 per cent), Tassie (+100 per cent), NSW (+65 per cent) and Victoria (+35.3 per cent).

“The surge in land sales should see a recovery in the number of slabs being poured as early as the December quarter,” continued Mr Reardon, “as customers proceed through the process to design and construct a new home.

“This will protect employment in the residential building industry and across the economy into 2021.”

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