Building Approvals Remains Risk to Economy
Approvals for private sector housing continue their struggle to gain momentum as Building Approvals figures released by the Australian Bureau of Statistics today revealed only a marginal increase.
The number of private houses approved increased by 1.6 per cent, seasonally adjusted, while a massive drop of 40.5 per cent was recorded in residential apartments.
Chief Executive Officer of Master Builders Australia, Wilhelm Harnisch, said the figures were disappointing given recent Reserve Bank rate cuts.
“The private housing increase of 1.6 per cent is far too low in what should be a more advanced recovery after interest rate cuts in May and June 2012, as well as November and December 2011.
“Builders continue to report that new home buyer confidence remains poor and is a key factor holding up a recovery for the housing industry.
“The massive drop in approvals for apartments is also concerning, but reflects the volatile nature of this segment of the market.
“Overall, the July building approvals figures point to the need for a concerted effort by Commonwealth, State and Territory governments to act and stimulate the sector. The industry in NSW is anxiously awaiting new home buyer’s incentives in that state to take effect in October, to boost growth.
“The valuable contribution of the housing sector, underpinning economic growth and jobs is at risk if there is not a significant improvement,” Mr Harnisch said.