Media Release
1 December 2009
MIXED BAG OF APPROVALS DATA
Statement by Peter Jones, Chief Economist
ABS approvals data for October were mixed, with another slide in units and townhouses offsetting a
solid
increase in house approvals,
according to Master Builders Australia, the peak body for the
building and construction industry.
Mr Peter Jones, Chief Economist, said “The negative headline figure masks encouraging strength in
the growth of new house approvals, but cannot hide the extreme volatility occurring around a
disastrously low base in ‘other dwellings’ approvals.”
“He said investor-driven building
of units and apartments continues to
be affected by the credit
crunch with approvals running at an annualised 35,000 – still 40 per cent below the peak.”
“The concern is that the fragile housing recovery is still very one-dimensional, and remains
hamstrung by tight lending requirements affecting investor-driven unit and apartment builders.”
He said, “A housing recovery is by no means a foregone conclusion, particularly as the First Home
Owner ‘boost’ scheme phases out.
“The big question is whether a strengthening trend in unit approvals growth can overcome the next
big hurdle of higher interest rates.”
“Ultimately, the economy needs a recovery in residential building
to drive a resumption
in
sustainable economic growth and pre-emptive
rate
rises
by the Reserve Bank threaten
to derail
a
still vulnerable economy.”
The total number of dwelling units approved, seasonally adjusted, fell
by 0.6
per cent to
12,814 in October, to be up by 11.7 per cent on the same month in the previous year.
Private sector house approvals rose
by 5.0
per cent to
9,642
to be up 25.7
per cent on the
same month last year. The more volatile private sector ‘other dwellings’ (apartments and
townhouses), fell
by 19.3
per cent in October
to be 28.9
per cent lower
than in October
2008.
The value of non-residential building approvals, seasonally adjusted, fell by 14.4 per cent in
October, close to levels achieved prior to the global financial crisis in the latter part of 2008.
“The benefit of the Government’s stimulus spending continues to be evidenced in the approvals
data, working to stabilise non-residential approvals after the free-fall experienced earlier.”
“The value of education-related building approvals
was 44 per cent of the total, still high, though
down from peak levels achieved in the middle of the year as early-phase indicators
related to the
BER program begin to taper off.”
For further information: Peter Jones, Chief Economist, Mobile 0403 440 838
NEWS 
