Australian residential building approvals signal strong start for new home construction this year; momentum in approvals slowly shifting from multi-units to detached houses: Housing Industry Assn.

CAMPBELL, Australia , May 5, 2014 (press release) – ABS figures for residential building approvals still signal a strong 2014 for new home construction, said the Housing Industry Association, the voice of Australia’s residential building industry.

“Building approvals for the month of March 2014 are consistent with healthy growth in new home building activity this year, although the approvals cycle itself may well have peaked,” said HIA Chief Economist, Dr Harley Dale.

“New home building has a large reach into the wider domestic economy and the sector is very much Australia’s economic barometer in 2014,” remarked Harley Dale.

“If you’re searching for highlights to the Australian economy, new housing is the best shot you can take,” commented Harley Dale.“ Leading indicators such as building approvals are clearly a positive for the economic outlook. How many of these approvals are converted into dwelling commencements and over what timeframe will exert a considerable influence over wider domestic economic activity.”

In March 2014 total seasonally adjusted building approvals fell by 3.5 per cent to 15,598, marking the second consecutive monthly decline. Detached house approvals were effectively flat in the month (-0.5 per cent) but grew by a healthy 7.7 per cent over the March quarter. Approvals for ‘other dwellings’ fell by 7.5 per cent in the month and were down by 7.2 per cent over the March 2014 quarter.

“The momentum in approvals has slowly shifted from multi-units to detached houses and that is evident in the March quarter results,” noted Harley Dale. “That having been said, multi-unit approvals hit a record high in the December quarter last year.”

“There is a considerable amount of economic uncertainty and angst around at present. It will be a very beneficial outcome for the Australian economy if the new home building recovery can carve through all that while at the same time broadening its geographical reach,” concluded Harley Dale.

Seasonally adjusted building approvals increased in March 2014 in New South Wales (+8.0 per cent) and Tasmania (+33.1 per cent). Approvals were flat in South Australia, and fell in Victoria (-12.5 per cent), Queensland (-3.3 per cent), and Western Australia (-9.1 per cent). In trend terms, building approvals increased by 0.7 per cent in the ACT, but declined by 25.0 per cent in the Northern Territory.

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