Dwelling Approvals Flat In February As Trend Turns Negative

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7th April 2008, 02:51pm - Views: 474





Industry Construction Master Builders Australia 1 image

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Media Release








7 April 2008 


DWELLING APPROVALS FLAT IN FEBRUARY 

AS TREND TURNS NEGATIVE

Statement by Mr Peter Jones, Chief Economist

Dwelling approvals were barely unchanged in February and are now falling in annual terms as

the market falters in the wake of higher interest rates, according to Master Builders Australia,

the peak body for the building and construction industry.  

Mr Peter Jones, MBA’s Chief Economist, said “Recovery in residential building is being set

back as a result of

interest rate increases by the Reserve Bank

and, independently, by the

banks they pass on higher borrowing costs.”

“Australia now seems destined to experience a chronic shortage of housing for an extended

period.  The latest data show national approvals running at an annual rate of 158,000, whereas

at least 190,000 per annum are required simply to meet underlying demand with another

20,000 per annum needed on top of that to make up for the existing shortfall.”

“Approvals of 210,000 per annum would be needed to be maintained for at least five years to

adequately cater for Australia’s housing needs.”  

“The problem is,

higher interest rates weaken investment in housing and this compounds

the

undersupply situation.  Further out, when rates eventually begin to fall there will be a risk of a

housing boom developing.”

“The total number of dwelling units approved, seasonally adjusted,

rose by 0.1 per cent to

13,146 units in February, to be 1.6 per cent lower than the same month the previous year.”

“Private sector house approvals

rose by 0.8

per cent to 9,138, to be

up 8.7

per cent on the

same month last year.”

“The more volatile private sector ‘other dwellings’ (apartments and townhouses),

fell

by

0.9 per cent in February, to be 19.4 per cent lower than in February 2007.”


For further information contact:

Peter Jones, Chief Economist Work 02 6202 8888, Mobile 0403 440 838






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