Statistics show that building approvals have reached record levels.
In January 2014, the number of dwellings approved rose 1.3 per cent, in trend terms, and has been on the rise for 15 months according to the Australian Bureau of Statistics (ABS).
Private sector house approvals rose by 2.0 per cent, in trend terms, which has now risen for 13 consecutive months.
According to the Housing industry Association (HIA) senior economist Shane Garrett, total dwelling approvals rose by 6.8 per cent in seasonally adjusted terms, which provides a continuation of the strong second half performance during 2013.
“Over the past twelve months, approvals have totalled over 182,000, the highest twelve month total since 2004. In the three months to January, approvals were at an annualised level of over 200,000,” Garrett says.
“This indicates that the pipeline of residential building work is looking particularly healthy. These approvals should translate into a boost in real activity on the ground over the coming months,” he predicted.
Total detached house approvals in January increased by 8.6 per cent, with multi-unit dwelling approvals rising by 4.7 per cent. In seasonally adjusted terms, total dwelling approvals during January numbered 17, 514, which is the highest result for a single month in more than 11 years.
“Today’s figures show that the housing activity may finally be reaching the kind of levels demanded according to market fundamentals. Over the past decade, Australia has outshone almost all developed economies in terms of economic growth and population increases, yet structural barriers largely impeded an adequate response in housing supply,” Garrett explained.
“We are now seeing a real opportunity to begin plugging the housing deficit that has opened up over the last decade.”
Master Builders Australia chief economist Peter Jones says this latest data is the highest monthly number – in seasonally adjusted terms – since August 2002 and only the sixth time that monthly approvals have exceeded 17,000 since records began in 1983.
However, Jones says the boost in building approvals should not be a cause for the Reserve Bank to move early on interest rates.
“The 17,514 dwelling units approved seasonally adjusted in January represents a 6.8 per cent increase on the previous month and a rise of over 30 per cent on January 2013. In annualised terms, building approvals are now running at more than 200,000,” Jones says.
“Particularly encouraging was the 8.3 per cent increase in housing approvals, confirming a broadening of the recovery to a more sustainable footing.”
By the numbers
The following changes occurred in dwelling approvals, in trend terms:
New South Wales increased by 1.5%
Victoria increased by 1.4%
Queensland increased by 2.6%
South Australia increased by 2.7%
Western Australia increased by 0.7%
Tasmania decreased by 1.2%
Northern Territory decreased by 28.5%
Australian Capital Territory decreased by 2.3%
The following changes occurred in private sector house approvals, in trend terms:
New South Wales increased by 2.3%
Victoria increased by 3.2%
Queensland increased by 1.2%
South Australia increased by 2.8%
Western Australia was flat