Housing Approvals Soar to 11 Year Highs

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Tuesday, March 4th, 2014
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A jump in detached housing has seen residential building approvals in Australia soaring to eleven year highs in the latest sign of increasing home building activity.

On a seasonally adjusted basis, the overall number of dwelling units approved for construction throughout the country rose 6.8 percent in January to come in at 17,514 – the highest number on record since August 2002, according to ABS figures released on Tuesday.

Whilst detached housing led the way – soaring 8.3 percent on a seasonally adjusted basis to come in at four year highs of 9,642 (public and private) – approvals in the multi-residential segment also rose 4.6 percent to come in at 7,812.

Compared with the same period twelve months earlier, housing and apartment approvals are up 34.6 percent.

The data follows yesterday’s report from Housing Industry Association which showed that sales of new homes over the three months to January were 22 percent higher compared with the quarter ended January last year.

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RBC Capital Markets senior economist Su-Ling Ong said the latest data provided further confirmation about an improving outlook for the sector.

“It was a pretty decent jump in approvals in the month of January” Ong is quoted as saying on Australian Associated Press.

“That underlying trend continues to strengthen and the composition was very good as well. It was driven by a rise in approvals for private sector houses.

“It’s very much consistent with this upswing in residential housing construction gaining a bit of momentum.”

Approvals were up in all major states, led by Tasmania (up 10.6 percent), South Australia (10.5 percent) and Victoria (10.3 percent), with more modest rises being observed in Western Australia (5.6 percent), New South Wales (5.4 percent) and Queensland (1.0 percent).

Outside of housing, the figures show also provide further evidence of an upturn of the pace at which new work is coming in in commercial building.

On a trend basis (stripping out both seasonal factors and large one-off movements), the value of approvals in non-residential building was up 1.7 percent.

Longer term, seasonally adjusted figures show the overall value of non-residential building approvals was up 5.2 percent in the six months to January compared with the previous six months.

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