Housing finance commitments rose in May, finally breaking a run of seven consecutive falls, according to figures released this week by the Australian Bureau of Statistics.
The total number of dwellings financed for owner occupiers, seasonally adjusted, rose by 1.9 per cent in May, to be down 24.4 per cent on May last year.
The number of loans for the purchase of new dwellings rose by 4.7 per cent in May, while loans for the construction of dwellings fell by 2.2 per cent in May.
The number of loans for the purchase of established dwellings rose by 2.3 in May, to be down 26.1 per cent on the same time last year.
On the other hand, the value of lending to finance the purchase of investment housing rose by 2.5 per cent in May, to be up 17.3 per cent on a year ago.
The building industry was pleased to see that the value of lending to finance construction of dwellings for rent or resale rose by 28.1 per cent in May, to be up 5.6 per cent on a year ago.
Peter Jones, Chief Economist for peak building and construction organisation Master Builders Australia, said that a period of stable interest rates is critical for the housing market in order to engender confidence and encourage up-graders, investors and first home buyers.
"Loans for the building or purchase of new dwellings are beginning to flatten out after the correction seen during the past four or five months, and remain well up on the low point in late 2008", Mr Jones said.
"Although there is a solid pipeline of new building work yet to be done, Australia needs a major phase of residential building to go anywhere near to meeting the housing needs of the population", he added.