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2016 Industry Outlook

[20/01/2016]

The outlook for the housing industry in 2016 is looking brighter than originally forecast with official figures indicating a surprisingly strong enthusiasm for home loans in NSW, Victoria and Tasmania towards the end of 2015.

According to the Australian Bureau of Statistics, owner-occupier lending rose 2.4 per cent to $21.8 billion in November. A much larger gain compared to just 0.4 per cent growth in October, enabling the total yearly growth to be up 25.8 per cent in 2015.

Leading Australian economists stated that lending to owner-occupiers remains steadily growing, in contrast to the general cooling of the Australian housing market as a whole. Further growth was seen in figures showing loan approvals for the purchase or construction of new housing also rose to be 8.8 per cent higher than a year ago.

These statistics highlight that more Australians are taking out home loans to buy or build homes to live in, suggesting confidence in the job market and interest rate outlook.

The figures contrast many other indicators that the housing market is relaxing, including building approvals, auction clearance rates and house prices which were all slowing.

The ABS figures also showed an unexpected 0.7 per cent increase in loans to housing investors, the first rise in seven months. However, year-to-year investor lending was down 7.7 per cent and trending downwards.

The $11.5 billion of investor lending commitments over November took total lending for the 12 months to $156.34 billion, up 13 per cent on an annualised basis.

Overall this points to a promising year for the housing industry in 2016 with confidence in the market evident.
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