Australia

Dwelling approvals rise 3.1 per cent in February 2013

FOLLOWING two consecutive months of falls, the number of dwellings approved in February 2013 increased by 3.1 per cent, in seasonally adjusted terms, according to the latest data released by the Australian Bureau of Statistics (ABS) last week.

Dwelling approvals increased for the month of February in South Australia (23.0 per cent), Western Australia (5.3 per cent), Queensland (3.8 per cent) and Victoria (0.3 per cent) but decreased in New South Wales (-7.7 per cent) and Tasmania (-5.8 per cent), in seasonally adjusted terms.

In seasonally adjusted terms, approvals for private sector houses rose 0.5 per cent in February. Private sector house approvals rose in South Australia (9.9 per cent), New South Wales (7.8 per cent) and Victoria (6.3 per cent) but fell in Queensland (-7.7 per cent) and Western Australia (-6.4 per cent).

The value of total building approved fell 3.1 per cent in February, in seasonally adjusted terms, following an upwardly revised increase of 7.0 per cent in January. The value of residential building rose 2.5 per cent while non-residential building fell 11.0 per cent.

Despite the positive result, Master Builders Australia said the headline increase in dwelling approvals provides a false picture of a housing recovery, with the seasonally adjusted figures buoyed by an unusually high public sector housing figure.

Peter Jones, Master Builders Australia's Chief Economist, welcomed the improvement, but said a negative trend has emerged in the 'other' dwellings sector (units and apartments), with a 2.4 per cent decrease in February.

"The overall negative trend in approvals is very worrying for builders. Despite green shoots and early signs of a recovery, momentum has failed to build," Mr Jones said.

"The industry had been hoping for a much stronger recovery to take hold and the feedback from builders is that conditions are still very tough."

Housing Industry Association (HIA) Economist, Geordan Murray, said that with indicators of consumer sentiment having improved over recent months, the latest building approvals data may be an early sign that this improved sentiment is flowing through to activity on the ground.

"After two consecutive months where approval numbers slipped back it is pleasing to see a material improvement in February," Mr Murrary said.

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