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Property building approvals in Australia hit highest level in three years

The Housing Industry Association, the voice of Australia’s residential building industry, also pointed out that the growth is dominated by multi units rather than detached houses and it would be good for the housing market if there were more detached family homes being built.

Total residential building approvals in September 2013 increased by 14.4% compared with August on a seasonally adjusted basis. This brought total approvals to 16,318 during the month.

‘We have not seen a figure higher than this since March 2010. Over the last three months, building approvals have been running at an annual rate of around 180,000,’ said HIA senior economist Shane Garrett.

In September 2013, total seasonally adjusted building approvals growth was strongest in New South Wales with growth of 25.2%, followed by Victoria with growth of 18% and Western Australia with growth of 12.3%.

Approvals also increased in Queensland with growth of 3.8% and South Australia saw growth of 0.8. In trend terms, total building approvals were flat in the Northern Territory and declined by 4.3% in the ACT. Tasmania also saw approvals fall, down 10.3% during September.

Growth was driven by the multi-unit segment of the market where approvals increased by 31.8% compared with the previous month. Detached house approvals rose by only 1.9% over the same period.
 
‘This demonstrates that the recovery is not yet as broad based as we would like. If we look at the quarter ended September 2013, approvals increased by 8% compared with the previous quarter. Total approvals are 19.3% higher when compared with the same quarter of 2012,’ explained Garrett.
 
‘The main message from the figures is that the Royal Bank of Australia’s interest rate cuts over the past two years are helping to support activity on the ground. However, it is important that residential construction activity continues to grow in order to make up for the shortfall in building over the last decade. Residential land being made available more speedily would be one outcome supportive of this objective,’ he added.

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