Lending for new homes in Australia fell in November 2012, according to the latest ABS Housing Finance data.

Lending for the construction and purchase of new build homes by owner occupiers declined by 4.8 per Cent, which "highlights the tenuous nature of the forecast housing recovery in 2013", according to the Housing Industry Association.

"It has been encouraging to see steady improvements in lending for construction and the purchase of new homes throughout 2012, particularly in the latter half of the year. This is one indicator suggesting new home building activity could improve in 2013," said HIA Economist, Geordan Murray. "However, the November data provides a timely reminder of just how fragile conditions are at present."

The 4.8 per cent monthly decline in new home lending was driven by a fall of 1.8 per cent in loans for construction and a 10.3 per cent fall in loans for the purchase of new dwellings. The number of loans for existing property, net of refinancing, declined by 1.3 per cent.

"We would obviously like to have seen the housing finance record a positive move in November, particularly following the cut to interest rates in October, however we don't consider the overall picture to be negative. The number of loans for construction and the purchase of new homes are well above the levels we were seeing this time a year ago," added Murray.

In November 2012 the total number of seasonally adjusted loans for the construction and purchase of new homes declined in all states. The ACT was the only exception increasing by 18.0 per cent. The number of loans declined 0.1 per cent in New South Wales, 11.0 per cent in Victoria, 1.4 per cent in Queensland, 1.7 per cent in South Australia, 4.1 per cent in Western Australia, 27.0 per cent in Tasmania and 5.1 per cent in the Northern Territory.

"In the second half of 2012 we had a number of interest rate cuts as well as substantial changes to government incentives in a number of states but it is still too early to untangle the impact these policy drivers are having on new home building at this point in time," he concluded. "We will be monitoring the housing finance data over the coming months to gauge the effects."

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