Media Release
4
November 2009
VOLATILE UNIT AND TOWNHOUSE APPROVALS
Statement by Peter Jones, Chief Economist
ABS approvals data for September are encouraging, although a big
increase in unit and townhouse
approvals only acted to offset the big fall that occurred in
the previous month, according to Master
Builders Australia, the peak body for the building and construction industry.
Mr Peter Jones, Chief Economist, said “The positive headline figure masks the
fact that previous
strength in the growth of new house approvals is now waning, and that volatility in ‘other
dwellings’ approvals is occurring around a disastrously low base.”
“He said investor-driven building of units and apartments is still being 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.”
“The big question is whether a strengthening trend in unit approvals growth can overcome the next
big hurdle, that of higher interest rates.”
He said, “A housing recovery,
so
critical
to a sustainable
economic downturn,
is by no means a
foregone conclusion, particularly
with
the looming fall back associated with the end of the First
Home Owner ‘boost’ scheme.
“Ultimately, the economy needs the private housing sector to drive a resumption
in sustainable
growth and pre-emptive
rate
rises
by the Reserve Bank will therefore
threaten a still vulnerable
economy.”
The total number of dwelling units approved, seasonally adjusted, rose
by 2.7
per cent to
12,476 in September, to be up by 11.7 per cent on the same month in the previous year.
Private sector house approvals rose
by 0.3
per cent to
8,972
to be up 18.6
per cent on the
same month last year. The more volatile private sector ‘other dwellings’ (apartments and
townhouses), rose
by 14.6 per cent in September
to be 11.3
per cent lower
than in
September 2008.
The value of non-residential building approvals, seasonally adjusted, fell by 37.1 per cent in
September, and is up 8.0 per cent on September 2008.
“The benefit of the Government’s stimulus spending is showing up in some stabilisation of non-
residential approvals after the free-fall experienced earlier.”
“Education-related building, usually 10 per cent of total non-residential approvals, were 61 per cent
of the total in September.”
For further information: Peter Jones, Chief Economist, Mobile 0403 440 838
NEWS 
