Australia

Dwelling approvals fall in October 2011 for second consecutive month

A DECLINE in dwelling approvals has been recorded for the second consecutive month, with new Australian Bureau of Statistics (ABS) figures revealing the number of dwellings approved in October 2011 fell by 10.7 per cent, following a revised fall of 14.2 per cent in September.

Dwelling approvals decreased for the month of October in Queensland (-19.5 per cent), Victoria (-18.0 per cent), Tasmania (-12.8 per cent), South Australia (-3.4 per cent) and New South Wales (-0.4 per cent) but rose in Western Australia (2.1 per cent) in seasonally adjusted terms.

In seasonally adjusted terms, approvals for private sector houses fell 7.5 per cent in October with falls in Victoria (-12.3 per cent), Queensland (-5.9 per cent), Western Australia (-5.9 per cent), New South Wales (-1.6 per cent) and South Australia (-0.3 per cent).

In October, the value of total building approved decreased 2.4 per cent in October in seasonally adjusted terms, following a decrease of 14.1 per cent in September. The value of residential building fell 6.1 per cent while non-residential building rose 4.7 per cent.

Master Builders Australia said the sharp fall in residential building approvals continues the negative trend that developed one year ago and called for the Reserve Bank of Australia to further act on interest rates, following its decision to cut rates last month.

"Confidence in the residential sector has plummeted and although this figure predates the November rate cut the Reserve Bank will need to do more to turn the situation around," said Master Builders' Chief Economist, Peter Jones.

"Master Builders reiterates its call for the Reserve Bank to cut rates further to reignite activity in the building industry."

The Housing Industry Association (HIA) said building approvals in October 2011 slumped to their lowest level since March 2009, with total approvals falling to a level 30 per cent below that of the same month last year.

"This outcome vindicates the November interest rate cut, justifies the case for a further cut next week, and highlights the folly of blindly focussing on a budget surplus objective for 2012/13," said HIA Chief Economic, Harley Dale.

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