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    ABS data for May indicates rebound in home building approvals

    Housing Industry Association

    The Housing Industry Association (HIA), which represents Australia’s residential building industry, reveals a rebound in residential building approvals in May after a lacklustre performance in the preceding months.

    ABS data indicates there were 16,425 dwellings approved in May, an increase of 9.9 per cent during the month. These figures are closer to the peak levels seen in the end-2013 - January 2014 period.

    According to HIA Economist Geordan Murray, declining approval numbers during the February-April period following the peak in January this year had raised doubts about the longevity of the home building recovery. However, the May results indicate the recovery will continue for the rest of the year.

    Over 17,700 dwelling approvals were recorded in January reaching a peak with the five largest states all recording strong approval numbers at the same time. The slowdown in the three months following January was caused by the characteristic volatility in multi-unit approvals but the volume of approvals still points to a very strong level of new home building activity throughout 2014.

    Geordan Murray observes that the housing recovery, which was initially confined to New South Wales and Western Australia, appears to be gaining broader momentum in all jurisdictions with the exception of ACT.

    Volume of detached dwelling approvals was steady at 9,426, up by 0.6 per cent in May. There were 6,998 multi-unit dwellings approved, which represents an increase of 25.5 per cent in the month and mainly driven by a rebound in multi-unit approvals in NSW (up by 47 per cent) and Queensland (up by 150 per cent). All other major markets recorded falls in multi-unit approvals in May, especially in Victoria, which declined by 19 per cent.

    Total building approvals in seasonally adjusted terms increased in May 2014 in New South Wales (+18.7 per cent), Queensland (+45.0 per cent), Western Australia (+0.4 per cent), and Tasmania (+9.8 per cent) but declined in Victoria (-8.5 per cent), and South Australia (-6.7 per cent). In trend terms, building approvals increased by 8.7 per cent in the Northern Territory but fell by 9.6 per cent in the ACT.

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