New loans to build houses surged by more than 9% in October to its highest level in 15 years as first homebuyers rush to cash in on the government's grant boost according to new data from the Australian Bureau of Statistics.
The number of construction loans for new houses (trend) rose 3.9% in October 2009 following an increase of 4.3% in September 2009. The seasonally adjusted series rose 9.2% to 8,016, the highest level since August 1994 and almost double the number recorded in 2008.
The total value of owner occupied housing commitments rose 0.2% in October 2009, following a revised increase of 0.2% in September 2009.
"Owner occupied commitments remaining at the same level as the month previous is further good news, however we must look at these figures with some perspective," said Michael Russell, CEO of Mortgage Choice. "October loan commitments were lodged prior to borrowers knowing exactly when rate rises would begin to occur. As such we'll need to keep a close eye on what the rest of the year brings and take a very keen look at the next couple of month's numbers. Regardless, October's ABS housing finance data strengthens the confidence we have of the Australian housing market recovery continuing well beyond the expiration of the First Home Owner Boost."
Russell added that the real winner from this data is the construction industry, which will be relieved to see the number of construction loans continuing to grow.
Non-banks have gained a small portion of the mortgage market. The number of owner occupied dwellings financed by non-banks (trend) rose 0.6% in October 2009 after an increase of 0.8% in September 2009.