Latest Building Approvals Cast Doubt On Residential Building Upturn, Commercial Building Weakens As 1

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3rd August 2010, 02:42pm - Views: 532





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Media Release






3

August 2010


LATEST BUILDING APPROVALS CAST DOUBT ON 

RESIDENTIAL BUILDING UPTURN, 

COMMERCIAL BUILDING WEAKENS AS STIMULUS FADES

Statement by Peter Jones, Chief Economist

Another fall

in dwelling approvals in June is

further evidence of a faltering residential building

upturn, and notwithstanding a monthly rise, there has been a big decline in non-residential building

approvals as the boost from the Government’s economic stimulus ends, according to Master

Builders Australia, the peak body for the building and construction industry.

Mr Peter Jones, Chief Economist, said “The good news

is that a recovery in approvals of units and

apartments

may

be gaining momentum as investor-driven activity finally begins to shake off

lingering effects of the credit squeeze.”

He said, “The bad news

is that total dwelling approvals are running at an annualised rate of around

160,000, forty per cent below what is required to make inroads into Australia’s massive supply

shortage.”

“Government programs like the BER prevented

a total collapse in commercial or non-residential

building activity, but the spike in approvals has now reversed, shrinking

to around $20 billion

in

annualised terms, a decline in the order of 40 per cent from levels achieved in 2008.” 

“Private sector commercial building activity remains

weak,

and Master Builders’ recent national

survey reveals that the industry is becoming increasingly concerned about prospects.”

He said “A period of interest rate

stability from the Reserve Bank is critical, not only to ensure a

sustainable upswing in residential building,

but in order to safeguard against any further ratchet

down in non-residential building activity.” 


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

by 3.3

per cent to

13,267 in June, to be up by 13.2. per cent on the same month in the previous year.


Private sector house approvals fell by 2.5 per cent to 8,620 to be up 0.5 per cent on the same

month last year. 


The more volatile private sector ‘other dwellings’ (apartments and townhouses), rose by 2.7

per cent in June to be up 57.6 per cent on June 2009.


The value of non-residential building approvals, seasonally adjusted, rose by 4.4 per cent in

June to be 39.8 per cent down on June 2009.


For further information:

Peter Jones, Chief Economist, Mobile: 0403 440 838






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