The first quarterly economic report for Victoria is now available.
Strong population growth and a robust labour market remain the primary factors for the surge in new home-building activity and dwelling approvals in Victoria over the past year. However, new economic data indicates sluggishness in the Victorian housing market.
While new dwelling approvals peaked at over 76,000 in the year to June 2018, the latest data is indicating an annual total drop of 13.6 per cent with signs of further decline, driven largely by apartments. The decline is due to a decrease in housing demand caused by a tighter credit environment. This is seen in the number of owner occupier loans for new houses and the value of housing investor loans falling by 15.4 per cent and 22.8 per cent respectively in the 12 months to February 2019. On a positive note, the decline has provided room for first-home buyers to enter the market, with their share of occupier home loans increasing dramatically since mid-2017, from 22.3 per cent in 2016/17 to 28.7 per cent in the 12 months to February 2019.
For the full report, click here.