Housing Industry Association (HIA) has announced that the level of new home lending remained very healthy in July 2009.

The HIA Chief Economist, Dr Harley Dale, said that the number of loans for construction eased slightly in July after eight straight months of growth.

"Construction lending increased by 15% over the three months to July 2009 and is up by 41% over the year to date, clearly signalling the potential for a strong recovery in new home building," Dr Dale said.

The total number of seasonally adjusted loans for owner occupiers (net of refinancing) fell by 2.2% in the month of July 2009 but was up by 5.1% over the 'quarter'. The number of loans for construction eased by 0.7% over the month. The number of loans for the purchase of new dwellings eased by 0.5% in July but was 2.8% higher over the quarter. Lending for established dwellings (net of refinancing) fell by 2.5% in July but was up by 3.8% over the quarter.

"Loans to both first time buyers and non-first time buyers are higher over the three months to July 2009 compared to the same period last year. First home buyers are leading the way still but momentum is waning so it is encouraging to see a lift outside this market, something that was lacking earlier in the year," he said.

"The interest in new home building from trade-up buyers is growing and this trend, along with a recovery in new investment, needs to continue to ensure a sustainable and broad-based recovery for residential construction," Dr Dale said.

In seasonally adjusted terms the total number of owner occupier loans in July 2009 fell in New South Wales (-0.8%), Victoria (-1.3%), Queensland (-3.1%), Western Australia (-3.3%), Tasmania (-8.9%), and the Australian Capital Territory (-14.4%).

The total number of loans increased by 0.1% in South Australia and by 4.9% in the Northern Territory.

10 September, 2009