Australia

Building approvals record modest rise in July 2011

FOLLOWING three consecutive months of falls, the total number of dwellings approved rose 1.0 per cent in July 2011, in seasonally adjusted terms, according to new statistics released by the Australian Bureau of Statistics.

Dwelling approvals increased for the month of July in New South Wales (5.4 per cent) but decreased in Tasmania (-26.3 per cent), South Australia (-8.8 per cent), Victoria (-3.1 per cent), Queensland (-1.8 per cent) and Western Australia (-1.4 per cent) in seasonally adjusted terms.

In seasonally adjusted terms, approvals for private sector houses fell 0.2 per cent in July with falls in Queensland (-14.5 per cent), Western Australia (-8.2 per cent) and South Australia (-3.0 per cent). A rise in approvals for private sector was recorded in Victoria (8.7 per cent) and New South Wales (4.6 per cent).

The value of total building approved fell 4.4 per cent in July in seasonally adjusted terms. The value of total residential building fell by 1.2 per cent while non-residential building fell by 9.7 per cent after a 3.5 per cent rise in June.

On an annual basis, total dwelling approvals fell 15 per cent in the year to July, with private sector houses recording a drop of 12.1 per cent and private sector dwellings excluding houses recording a fall of 14.1 per cent.

Housing Industry Association (HIA) Senior Economist, Andrew Harvey, said twelve months of trend decline in approvals in part reflects the weak business and consumer sentiment that exists in the non-resource economy at the moment.

"However, this weaker environment does bring with it a couple of upsides for potential homebuyers.  Increasingly, the RBA has no option but to either cut rates or keep them on hold for a sustained period and this in itself would add to the confidence of consumers and prospective home buyers," said Mr Harvey.

"Second, as residential building levels have dropped off, builders have had to become increasingly competitive which means there are some very good buying opportunities for those in the hunt for a new home."

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