Latest housing finance figures from the Australian Bureau of Statistics show loans to owner occupiers in Queensland were down 1.1% in the month of February but up 8.3% over the full February ‘quarter’ (seasonally adjusted) – the strongest quarterly result of any State.
Lending for the construction or purchase of new homes performed strongly in February in Queensland – up 22.3%. Over the February quarter, lending for the construction or purchase of a new home fell 5.9%. It must be noted that the ABS do not seasonally adjust the figures for new home lending and therefore a decline of 5.9% over what is traditionally the quietest three months of the year should be considered a strong result. In contrast, lending for new homes outside of Queensland fell 10.5% in the February quarter.
Whilst Queensland lending and building approvals have been clearly trending upwards for a number of months now, lending and approvals across the rest of Australia are moving in the opposite direction.
Whilst the Queensland market is clearly now in a recovery phase, it must be emphasised that Queensland is growing off an historically low base and many more months of strong growth will be required to see lending and approvals return to historical average levels.
With other recent national economic data turning out weaker than expected, there is a strong likelihood of a cut in interest rates when the RBA board meets in May. A cut in rates in early May would provide a timely boost to the Queensland market just as the Building Boost Grant comes to an end on 30 April.