This article is from the Australian Property Journal archive
Building approvals have risen by 2.2% in the month of February, after falling for the previous eight months, according to the latest figures from the Australian Bureau of Statistics.
According to the ABS, a total of 12,213 dwelling units were approved in February 2006.
HIA’s chief economist Harley Dale said building approvals posted a positive result in February, thanks to the detached house market.
According to the ABS, detached house approvals increased by 4% to 8,739 dwelling units, while, multi-unit approvals fell by 2.2%, the third consecutive decline, to 3,474 dwelling units.
Dale said that the level of approvals was beginning to bottom for the cycle.
“There is a long way to go to see evidence of a sustained recovery in building approvals, but the early signs in 2006 were encouraging.
“Building approvals for detached houses do seem to have found a base and that is a positive sign for the housing industry.
“In an environment of low and competitive interest rates and only mildly weaker labour market conditions, we would hope to see a moderate recovery in detached house approvals and new house sales as we move through 2006,” he added.
Dale said the unfortunate caveat is that the severe affordability hurdles to home ownership that remain in play will constrain this recovery. That will continue to be the case until such time as governments in Australia realise that the ball is in their court to address the affordability problem.
While approvals for multi-units are still weakening, he said this market looks considerably softer than the detached house market.
“Underlying economic conditions do not suggest we are heading into free fall, however,” Dale said.
On a state by state basis, seasonally adjusted approvals rose by 21.5% in Queensland, by 17.8% in South Australia, and by 6.2% in Victoria.
Approvals fell by 21% in Western Australia, by 8.1% in New South Wales, and by 4.4% in Tasmania. In original terms approvals were up by 22% in the Northern Territory and by 271% in the Australian Capital Territory.
The latest figures from the ABS supports the HIA New Home Sales survey, which shows in the February 2006 quarter, the sale of new homes and units among Australia’s largest builders and developers increased by 7.6% to 8,644 dwellings.
By Kathryn O’Meara
