Tenuous signs of an emerging recovery in residential building follow the release of the November 2012 Building Approvals figures by the Australian Bureau of Statistics.
The total number of dwellings approved rose 2.9 per cent due to a 10.1 per cent increase in the approval of residential apartments, while private sector housing fell slightly by 0.3 per cent (seasonally adjusted). The total number of dwellings approved increased in November 2012 by 13.2 per cent on the previous year (seasonally adjusted).
Peter Jones, Master Builders Australia’s Chief Economist said the bounce in approvals is welcomed, but the nascent recovery has yet to move out of first gear.
“November’s headline increase in approvals appears to be narrowly based, reliant on an unsustainable spike in inner Melbourne units rather than any broad-based upswing.
“The danger is that the recovery could run out of steam as the impact of previous interest rate cuts appear to have failed in lifting new homebuyer confidence and underpinning a sustained housing recovery.
“Authorities are banking on a strong revival in residential building as the economy loses mining as its key driver. For this to eventuate, the Reserve Bank should cut interest rates at the next board meeting in February,” Mr Jones said.
ABS building approvals ticked up in November 2012 regaining some of the ground lost in October, said the Housing Industry Association, the voice of Australia's residential building industry.
"Today's positive headline result, a 2.9 per cent improvement in the dwelling approvals nationally, somewhat overshadows what is a rather poor update for most jurisdictions," said HIA Economist, Geordan Murray.
"Victoria was the only state which recorded an increase in dwelling approvals in November, posting an increase of 8.7 per cent. The improvement was driven by a rebound in approvals for multi-unit dwellings after a relatively soft result a month earlier. Concurrent declines in all other states and territories is concerning, although the modest declines observed in the larger states were insufficient to cause a decline in the national total," said Geordan Murray.
"Lower lending rates in the latter half of 2012 provided one of the necessary preconditions for an improvement in new home building and we are watching for the impact of the state based reforms to first home buyer incentives in NSW, Queensland, South Australia and Tasmania flow through to approvals data over coming months," said Geordan Murray.
In November 2012, total seasonally adjusted building approvals increased in only one jurisdiction, Victoria - up by 8.7 per cent. Approvals fell in South Australia (-13.8 per cent), Tasmania (-7.6 per cent), New South Wales (-4.0 per cent), Queensland (-1.5 per cent) and Western Australia (-1.0 per cent). In trend terms building approvals in November fell in both the Australian Capital Territory (-0.8 per cent) and the Northern Territory (-3.6 per cent).
