Australia

Dwelling approvals rise 7.4 per cent in March

THE number of dwellings approved rose 7.4 per cent in March 2012, in seasonally adjusted terms, following a revised fall of 8.8 per cent in February, according to the latest figures from the Australian Bureau of Statistics (ABS).

Dwelling approvals increased for the month of March in New South Wales (49.3 per cent), Western Australia (11.1 per cent) and South Australia (4.2 per cent), but decreased in Queensland (-8.7 per cent), Tasmania (-6.7 per cent) and Victoria (-5.0 per cent) in seasonally adjusted terms.

In seasonally adjusted terms, approvals for private sector houses rose 3.9 per cent in March with rises in South Australia (16.3 per cent), Western Australia (14.5 per cent), New South Wales (3.5 per cent) and Queensland (1.8 per cent). Victoria recorded a fall of 1.0 per cent.

The value of total building approved decreased 8.9 per cent in March in seasonally adjusted terms, following a decrease of 31.7 per cent in February. The value of residential building rose 1.3% while non-residential building fell 23.4 per cent.

The Housing Industry Association (HIA) said despite the improvement in March, approvals remain at very low levels, highlighting the urgent need for government action.

"While it is positive to see a 7.4 per cent improvement in building in March 2012 we must acknowledge that this followed an 8.8 per cent decline last month. The volume on building approvals remains at alarmingly low levels despite the increase in approvals in March," said HIA Economist, Geordan Murray.

Mr Murray said today's Federal Budget provides significant opportunity for the government to "provide the catalyst for a boost household and business confidence which is a must if we are to see an improvement in industry activity this year."

Peter Jones, Chief Economist, Master Builders Australia, said the residential approvals figure for March only offsets the previous month's fall, but added that the residential building industry is hopeful that confidence will improve following the Reserve Bank of Australia's (RBA) decision to cut the cash rate by 50 basis points to 3.75 per cent last week.

"As the impact of lower rates flows through we should see the number of residential building approvals pick up in the coming months," Mr Jones said.

"It is critical that policy works to ensure that any pick up in residential building over the remainder of the year translates into a strong and sustainable upswing."

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