This article is from the Australian Property Journal archive
RESIDENTIAL building approvals jumped 15.3% in March after two successive monthly falls of 5% and 2.7% respectively.
The numbers were skewed by a 51% rise in other dwellings, namely apartment and townhouses. Private housing approvals rose slightly by 0.7%.
ANZ senior economist Ange Montalti said the impact of a series of interest rate rises through the December quarter and the winding down of government assistance over this period not surprisingly have been weighing down on market activity into the March quarter.
According to Montalti, the three additional cash rate rises (March, April, May) will impose further downward pressure on approvals over coming quarters.
“However, the relative resilience in approvals in the face of this monetary tightening reflects support from underlying fundamentals (a considerable stock shortage and strong population growth) and a general improvement in economic and labour market conditions.
“The sharp rebound in approvals for the medium-density sector (albeit from very low levels) suggests credit is once again flowing to this sector. As part of this, strong momentum in dwelling prices over the past year will have been providing builders with renewed confidence that developments could generate required rates of return,” he added.
Approvals rose in all states except Queensland (down 1.9%) and Tasmania (down 5%). The largest rise was in New South Wales (up 43.5%). Trend approvals are rising in all States except for Tasmania. They are also falling in the two Territories. In the past year, approvals have risen everywhere except for the ACT. The strongest growth has been in New South Wales (up close to 90%) and in Western Australia (up more than 50%).
The value of residential approvals rose by 7.4% in March, with new residential building up by 6.7%, and additions and alterations up by 12%. The value of non residential building approvals rose by 0.3% after three massive falls, reflecting the tapering of the “Building the Education Revolution” program.
Australian Property Journal
