Australian Property News

Building approvals rise

Posted on Wednesday, September 01 2010 at 12:35 PM

Dwelling approvals rose in July after recording falls for the past three months, according to fresh figures from the Australian Bureau of Statistics.

The total number of dwellings approved rose by 2.3 per cent in seasonally adjusted terms.

More dwelling approvals were recorded in New South Wales (9.7 per cent), Victoria (12.1 per cent), South Australia (8.3 per cent) and Tasmania (4.4 per cent), but Queensland and Western Australia recorded fewer dwelling approvals with drops of 18.3 per cent and 4.9 per cent respectively.

The number of private sector houses approved fell by 0.1 per cent due to drops in several states, after falling for two months. However the number of private sector 'other dwellings' approved rose by 7.7 per cent.

The rise in dwelling approvals for July provides a cause for cautious optimism that the faltering residential building upturn can regain momentum, according to Master Builders Australia.

"Indications of a turnaround in house approvals, despite a flat result for July, is encouraging although it's too early to tell whether it will translate into a sustainable bounce-back following the recent setback experienced in the wake of the end of the (first homeowner) ‘boost’ scheme and higher interest rates," says Master Builders chief economist Peter Jones.

"The latest data may mark the beginning of a much-needed 'second wind' for the residential building recovery, given that total dwelling approvals are running at an annualised rate of around 160,000, 40 per cent below what's required to make inroads into Australia's massive supply shortage."

"An extended period of interest rate stability from the Reserve Bank is critical if there is to be a much-needed long and strong upswing in residential building."

Jones says the recovery in approvals of units and apartments may be gaining momentum as investor-driven activity attempts to shake off ongoing effects of the credit squeeze.