Recent figures from the Australian Bureau of Statistics have revealed new construction loans fell by 3.2% during May, but sit 11.5% higher than they were for the corresponding time in 2014.
The May decrease was driven by a reduction in the value of loans issued to owner occupiers, which fell by 5.4% during the month.
Construction loans to investors grew by 1.6% over May.
The fall in May continues the easing of construction lending since it peaked in December 2014, and while the Housing Industry Association (HIA) said building activity may be slowing, the full effects of recent Reserve Bank decision are yet to be felt.
“The decline in May occurred despite the RBA’s reduction in the official cash rate to a fresh historic low of 2%,” HIA economist Diwa Hopkins said.
“Nevertheless, the full effects of this reduction will take some time to fully wash through to private lending activity.
“Currently, the profile of dwelling-construction lending suggests that actual new home building activity might start to moderate over the short to medium term.”
The number of dwelling construction loans to owner occupiers (in original terms) in May 2015 compared with a year previously was lower in six states: down by 5.9% in New South Wales, down 5.4% in Victoria, down 9.4% in Queensland, down 11.8% in South Australia, down 27.3% in Western Australia and 3.0% lower in Tasmania over the past year.
