Residential building in Australia eases back but detached homes at highest for three years

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January 9, 2014 11:27 PM EST

Residential building approvals in Australia eased back during November 2013 but the recovery in activity remains strong, according to the Housing Industry Association, the voice of Australia’s residential building industry.

Total residential approvals dropped back by 1.5% during November compared with the previous month. However, the number of detached house approvals increased by 5.7% per cent with multi unit approvals falling by 8.8%.

Growth in total seasonally adjusted building approvals was strongest in South Australia at 23.2%, followed by New South Wales up 14.5% and Queensland up 8.3%. Increases in dwelling approvals also occurred in Western Australia with growth of 4%.

The largest decline in approvals affected Victoria where they were down 17.4%, followed by Tasmania down 10.4%. In trend terms, dwelling approvals fell sharply in the ACT by 9% and a slight increase of 0.5% was recorded in the Northern Territory.

‘Overall, the level of building approvals is high and the latest update indicates that activity in the market continues along a rising trend. Detached house approvals are at their highest level since during the stimulus in the middle of 2010,’ said HIA senior economist Shane Garrett.

‘Total dwelling approvals totalled almost 174,000 over the past 12 months, a level of building which is much more consistent with Australia’s longer term housing needs,’ he pointed out.

However, he said that the persistence of strong regional disparities means that the recovery cannot yet be seen as broad based. Despite strong increases in New South Wales, South Australia and Queensland, a sharp decline occurred in Victoria during November and the Tasmanian market continues to be plagued by declining activity,’ he explained.

‘It is vital that strong levels of home building continue so as to ensure that housing needs are met across all regions. This is all the more important in the context of the chronic housing under build over the past decade,’ he added.

He also pointed out that policy reform in the areas of residential land availability and building regulation must continue as a matter of urgency. ‘Strong levels of home building will be very supportive to wider economic growth, something particularly pertinent at this time,’ he said.

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