The appetite for residential land suddenly increased in July, as loans for the purchase of vacant land increased, according to the Australian Bureau of Statistics (ABS).
Funding commitments for the purchase of land increased for the second consecutive month in July, by 30% from June and 70% from the same period last year.
The announcement of the federal government's HomeBuilder program has boosted demand for residential land, said Tim Reardon, chief economist at the Housing Industry Association.
"Soaring land sales are expected to lead to a pickup in the number of slabs cast as early as the December quarter, as customers continue with the process of designing and building a new home. This will protect the house. employment in the residential construction industry. and in the economy as a whole until 2021, "he said.
All states saw significant increases in land lending during the month, with Tasmania, Queensland, Western Australia and South Australia seeing double the gains.
Overall, lending activity among buyers and investors continued to recover from the historic drop in May. In fact, the value of home loans increased 8.9% in July on a seasonally adjusted basis. This is the highest monthly increase ever recorded by ABS.
The homeowner and investor segments reported strong increases in real estate finance during the month, the former recording a gain of 10.7% while the latter posting growth of 3.5%.
This resumption of lending was not necessarily "unexpected", especially given the easing of interstate restrictions during this period, said Adrian Kelly, president of the Real Estate Institute of Australia.
"But the roller coaster will continue with further restrictions on Melbourne's second largest Australian market in August and September," he said.
Compared to last year, the value of homeowner loans increased 18.5% but fell 5.7% for investors.
The markets with the highest investor activity are New South Wales, Western Australia, and South Australia.
Among the major states, Western Australia reported the most substantial gain in overall housing finance with 17%. Victoria followed with a 9% increase – this, however, before the fourth stage lockdown imposed the following month.
"While Victoria will weigh heavily on the national outlook for the remainder of 2020, further improvement in housing finance indicators is expected for the rest of Australia in the coming months," said Timothy Hibbert , Senior Economist at BIS Oxford Economics.
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