The industry finally has something to smile about, with data showing new home lending increased in August.
According to the latest data from the Australian Bureau of Statistics, the overall profile for new home lending has essentially bottomed out through the middle months of 2011.
The number of loans for construction increased by 0.8 per cent in August 2011, while loans for the purchase of a new dwelling were up by 6 per cent, yielding a 2.4 per cent rise overall in new home lending for the month.
"Considering new home starts fell in 2010/11 and look set for a further decline in 2011/12, it is encouraging to observe this bottoming out in a key leading indicator of new residential construction activity," Housing Industry Association chief economist Harley Dale said.
"There is a long way to go to turn around the new home building cycle and ensure a sustained recovery can begin making inroads into the substantial dwelling shortage Australia faces.
"It is vital to see a commitment now and in future years from all levels of government to reduce the excessive and inequitable taxation of new housing which cripples new home affordability, hinders labour mobility, and constrains productivity growth."
In seasonally adjusted terms, the total number of loans for the month of August 2011 increased by 5.7 per cent in the Northern Territory, 1.1 per cent in Victoria and Queensland, 0.7 per cent in Western Australia, and 0.1 per cent in New South Wales.