Momentum in the housing building sector in Australia continues to gather steam as new data shows a sustained upturn in the number of single-unit houses approved for construction.
Published by the Australian Bureau of Statistics, the latest building approval figures indicate that the number of new private-sector single unit houses approved throughout the country rose 2.5 percent in seasonally adjusted terms throughout May to reach 8,113 – 11.6 up on the same month one year earlier and the highest level on record since March 2011.
Furthermore, whilst overall housing approval numbers across all housing types eased back 1.1 percent, this was caused only by a 9.8 percent drop in the statistically volatile multi-unit sector following an 18 percent rise in April.
Indeed, even with May’s drop-off in townhouses and apartments, Master Builders Australia Chief Economist Peter Jones notes that compared with the same period one year earlier, overall approval numbers are up 9.9 percent in the five months to May.
Jones says the single month fall in multi-residential buildings masks what is overall a positive story, adding that low interest rates and the recent fall in the dollar should further help boost the economy and the building sector.
“But the improvement in the indicators is a bittersweet pill for builders, because they really are struggling” Jones adds, referring to the latest Master Builders National Survey of Building and Construction showing builder sentiment and current industry conditions remain subdued.
“The real concern for builders is there has been no real tangible improvement for builders on the ground.”
The latest figures follow yesterday’s release of data showing the number of new home sales hit their highest level on record since November 2011 – data which Housing Industry Association Chief Economist Harley Dale says indicates the sector is gaining moment to carry through into the new financial year.
On a seasonally adjusted basis, new home sales have now risen for seven of the past eight months.
In terms of states, in trend terms (taking out seasonal factors as well as significant ‘one-off effects) the Australian Capital Territory led the way, recording a 4.1 percent jump in overall approval numbers followed by Tasmania (3.6 percent), Western Australia (2.7 percent), South Australia (1.8 percent), Victoria (1.2 percent) and New South Wales (0.8 percent).
Trend approvals declined 4.9 percent in the Northern Territory off a high base and 0.5 percent in Queensland.