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
NEWS 
