The latest ABS figures on housing finance show that new home lending saw a healthy rise during June.
The number of loans to owner-occupiers for dwelling construction rose 2.1% in seasonally adjusted terms in June, while loans for the purchase of new homes saw growth of 2.7%.
Overall, new home lending volumes increased 2.3% during the month and were 6.3% higher than the same month last year.
“The RBA cut its interest rate at the beginning of May so June’s housing finance results are the first month’s data to fully capture the effect of cheaper mortgage costs,” says HIA senior economist Shane Garrett.
“June was dominated by the federal election campaign which was the source of some uncertainty. This data indicates that the benefits of lower interest rates trumped any reluctance by buyers to enter the market during the election race.
“It’s likely that this month’s interest rate cut will help bolster activity on the new home building side.”