The recent data from the Australian Bureau of Statistics indicates big falls in lending to investors and owner occupiers for housing in New South Wales, says the Urban Taskforce.
“Investment lending for dwellings has dropped by 25.9 percent, seasonally adjusted, across Australia between March 2018 and March 2019. In New South Wales the drop has been 28 percent over the last year.” says Urban Taskforce CEO Chris Johnson. “The ABS say that the level of new lending for investment dwellings is at the lowest level since March 2011, across Australia.”
“Lending to owner occupiers for new homes (seasonally adjusted) in NSW has also dropped by 5.7 per cent in the last month, which is the biggest drop in Australia.”
“Clearly what is needed to arrest this worrying decline in the investment in new homes is federal government stimulus, and the announcement of a subsidy for deposits for first home buyers as announced by the federal government, and supported by the federal opposition is a good move in this direction.”
“The investor market has been hit by disincentives for foreign purchasers and by tightening credit limits by banks which have put a brake on the housing market. While the opposition’s proposals for changing negative gearing do not apply to new homes, their proposal to reduce the capital gains deduction will have an impact on the market related to the pipe line of new housing.”
“The Urban Taskforce believes that a serious focus on stimulus for the supply of new homes will be needed whichever party wins government at Saturday’s federal election.”
“There is no doubt that new housing approvals are slowing fast in Sydney, and that pre sales are also slow. Hopefully when the state and federal elections have both passed, more confidence can come into the housing industry so that the 300,000 jobs that are generated in NSW can be maintained. Our concern is that a number of developers and home builders are having to lay off building staff due to the low level of activity in the industry.”
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