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Building approvals rebound
Released 11 January 2012

After recording their lowest level in 29 months in October 2011, building approvals have rebounded in November.     

“Building approvals for both detached houses and other dwellings saw increases in November 2011, although the results come off a low base and total approvals remain significantly down on a year earlier,” said HIA Senior Economist Andrew Harvey.

Building approvals rose 8.4 per cent in November 2011, following a 10 per cent drop in October and a 14.8 per cent fall in September.

Detached house approvals rose by 4.9 per cent in November, while approvals for other dwellings rose by 16.1 per cent.

Total November approvals were down by 18.9 per cent on one year earlier.

“At least today’s approvals update is on the right side of zero growth,” Mr Harvey said.

He went on to say however that the level of total approvals remains weak and serves to reinforce the need for further interest rate cuts in the first half of 2012.

“Further rate cuts are absolutely essential to shore up homebuyer confidence in light of global economic conditions and to help ameliorate the effects of the increased consumer cautiousness that has pervaded the Australia economy since the GFC.

“Building approvals over the three months to November 2011 imply an annual level of housing starts of under 130,000. That is lower than the level reached in GFC-affected 2008/09 and strengthens the case for urgent government action in addition to further rate cuts,” Mr Harvey added.

The November 2011 results were mixed across Australian states and territories, but Victoria was the standout with approvals up by 39.9 per cent – a result exaggerated by the poor showing in October.

Approvals rose by 2 per cent in NSW and by 6.6 per cent in Queensland. They fell by 1.9 per cent in SA, 16.9 per cent in WA and 7.9 per cent in Tasmania.