Lending figures on Wednesday warn housing will remain in the doldrums for a while yet.
The figures were published as the housing industry made another cry for help – this time a plea for relief from its tax burden, rather than the more familiar demand for lower interest rates.
The number of housing loan approvals fell by 2.5 per cent in February, the seasonally adjusted figures from the Australian Bureau of Statistics (ABS) showed.
That was largely the result of an ongoing fall after a pre-Christmas rush to take advantage of expiring stamp duty exemptions in NSW.
But even aside from that, the rise of 0.6 per cent in the other states and territories was unimpressive.
Compared with a year earlier, the number of home loans approved in February was up by 9.8 per cent overall and by 10.0 per cent aside from NSW.
But in both cases the lion’s share of the rise was in the first six of the past 12 months – in the latest six months, approvals have risen only 1.3 per cent overall and by 2.7 per cent outside NSW.
The figures also show the value of loans to investors, which rose by 4.4 per cent in February, clawing back only about two thirds of the fall recorded in January.
The bounce left the value of lending to investors up by 6.6 per cent through the year but down marginally over the most-recent six months.
The figures do not signal a collapse in the building industry, but it must feel like death by a thousand cuts.
The number of loans to owner-occupiers, despite the recovery through the middle of 2011, is still below the level that prevailed with only a brief interruption by the global crisis from 2001 through to the end of 2009.
The ABS does not estimate the number of dwellings being financed by investor loans, but it is possible to make a reasonable stab at the total number of dwellings financed, based on the assumption that the same ratio of loan size to dwellings financed applies to investors and home-buyers.
If that assumption holds, then the total number of dwellings being financed, while up from the lows seen early in 2011 among flooding and cyclonic weather, is still below levels seen from early 2001 to late 2010, the global crisis included.
It’s no wonder that the housing industry has been calling for lower interest rates with increasing desperation recently, although the Housing Industry Association (HIA) tried a different tack on Wednesday.
It issued an impassioned plea for reduction of taxes on new housing.
HIA managing director Shane Goodwin said in a media release that taxes account for up to 40 per cent of the price of a new dwelling, throwing in a hopeful reference to productivity, the buzz word du jour, as he reiterated the HIA’s pre-budget submission.
“Taxes on new housing are a brake on economic activity, and represent a constraint on housing affordability and labour productivity,” he said.
It was worth a try.
