The Australian Bureau of statistics reports that a once hopeful resurgence in building approvals has already lost steam. Housing Industry Association analysts say sustained improvement is patchy across the country as many areas saw build approvals fall in seasonally adjusted terms in the last month of 2012. Experts say interest rates are low and may be heading lower for much of the market, but that credit conditions are still tight for new-home building and a true recovery will not begin until this area of the market improves. For more on this continue reading the following article from Property Wire.
A modest recovery in building approvals for new homes in Australia has lost its momentum and the new build market is patchy across the country.
The latest data from the Australian Bureau of Statistics shows the number of dwellings approved fell 4.4% in overall December 2012, in seasonally adjusted terms, following a rise of 3.4% in the previous month.
Dwelling approvals decreased in December in Tasmania by 21.8%, in Victoria by 12.3% and in New South Wales by 1.3% but increased Queensland by 7.9%, in South Australia by 1.7% and in Western Australia by 1.3% in seasonally adjusted terms.
In seasonally adjusted terms, approvals for private sector houses fell 3.3% in December and were down in Victoria by 12.7% and in Western Australia by 2.2%. But approvals rose in South Australia by 9%, in Queensland by 5.2% and in New South Wales by 1.2%.
The value of total building approved fell 1.9% in December, in seasonally adjusted terms, and has fallen for three months, the data also shows with the value of residential building falling by 3% and the value of non-residential building rising by 0.1%.
‘The data update provides little additional insight into prospective new home building activity in 2013. It remains the case that any signs of improvement in building approvals remain patchy in terms of both geographic location and type of dwelling,’ said Harley Dale, chief economist of the Housing Industry Association, the voice of Australia’s residential building industry.
He pointed out, however, that it is encouraging to see that despite the monthly dip in December, approvals for other dwellings increased by 12.3% in the December 2012 quarter.
‘Conversely, it is disappointing that detached house approvals continued to under perform in late 2012, falling by 1.6% in the December quarter. It is not possible to call a new home building recovery without evidence of a sustained improvement in this segment of the market,’ he explained.
‘Interest rates may be low and in need of heading lower, but the new home building sector still faces tight credit conditions together with excessive and inefficient levels of taxation and regulation. From the Federal level down, clear strategies and policies are required to address these avoidable cost imposts on a sector that needs to be a key driver of Australia’s economic growth,’ he added.
This article was republished with permission from Property Wire.