New figures released by the Australian Bureau of Statistics show that housing approvals across Australia have risen for the second consecutive month, suggesting that the stimulus measures by the federal government and lower interest rates are sparking a recovery.
Building approvals rose 3.5 per cent to 10,494 units in March, seasonally adjusted. Private sector house approvals increased by 2.8 per cent, up for the fourth consecutive month, while private sector apartments and townhouses rose by 2.8 per cent, a second consecutive rise.
While times are “undoubtedly still tough” the federal minister for housing, Tanya Plibersek, said that the figures were “pleasing”.
“These figures show that the Rudd government's first home owners boost, combined with low interest rates, is having a positive effect on the housing market,” she said. By the end of February, more than 42,000 Australians had taken up the boost.
“As these increased dwelling approvals translate to additional building it will support jobs in the housing and construction industry,” Plibersek said.
The construction and building industry welcomed the figures as evidence that the stimulus package was working.
The statistics highlighted the need to keep the first home owners boost beyond 30 June, particularly for new homes, Peter Jones, chief economist for Master Builders Australia (MBA), said.
Doing so will “ensure that momentum is sustained in a sector so vital to Australia’s short term economic prospects”, he said.
While the pick up in approvals gives cause for optimism, residential building activity here and now is suffering “another ratchet down”, he said.
Another “big fall” in housing commencements is expected for the March quarter and only 130,000 starts are predicted for 2008/09, which is a 17 per cent decline on the previous year, he said. With this in mind, it would be “unwise” to end the boost scheme prematurely, Jones said.
Senior economist at consultants Rider Levett Bucknall, Dr Andrew Wilson, said: “The ABS figures indicate a generalized impact of the First Home Owners Grant on the housing construction market. This outcome further strengthens the case for governments to maintain or develop similar initiatives directed at the critical job-generating house building sector.”
In Victoria, last month’s big lift in activity in the apartment and unit construction has been maintained with a further strong rise of 30 per cent compared to the previous month, senior economist at consultants Rider Levett Bucknall, Dr Andrew Wilson, said. The number of apartments and units approved for the year ending March 2009 is now 9 per cent higher than the same period ending March 2008, which is “a very encouraging statistic” given the general economic circumstances, he said.
