Today’s housing finance data for May suggested that buyer demand for newly constructed dwellings remains strong, despite a flattening in approvals over the past five months (see next chart).
The number of finance commitments for new dwellings (i.e. construction plus new) rose by a seasonally-adjusted 1.1% in May to be up 7.8% over the year and tracking some 15% above the 5-year moving average level (5YMA). Despite the current ‘boom’ being smaller than the post-GFC episode (which was fueled by significant first home buyer stimulus), it does at least appear to be more enduring, which is good news (see next chart).
Looking at at the state-by-state breakdown, which is presented below on a rolling annual basis since it is not seasonally adjusted, shows that new home finance commitments appear to have topped-out in New South Wales and Western Australia. However, this is being offset by Victoria, Queensland and South Australia where the number of commitments are still rising (see next chart).
Overall, another solid report for the housing construction industry.
