Volatility In Approvals As Interest Rates Threaten Recovery

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1st June 2010, 02:38pm - Views: 624





Industry Construction Master Builders Australia 1 image

Industry Construction Master Builders Australia 2 image

Media Release








1 June 2010


VOLATILITY IN APPROVALS 

AS INTEREST RATES THREATEN RECOVERY

Statement by Peter Jones, Chief Economist

A fall in private sector houses approved in April is a sign that recent rate rises are biting and Master

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

calls on the Reserve

Bank to take a more cautious approach.

Mr Peter Jones, Chief Economist,

said “Although

investor-driven activity may be beginning to

overcome lingering effects of the credit squeeze,

recovery in private sector house building is being

threatened by higher interest rates.”

He said, “The Government’s social housing stimulus will provide a boost, with the public sector

likely to contribute 20,000 dwellings to total activity this year.”

“A sustained upswing in residential building is by no means assured and higher interest rates could

pull the rug out from the private housing market if investors and homebuyers stay on the sidelines.”

“Master Builders urges the Reserve Bank to take a more cautious

approach on interest rates to

ensure a recovery in residential building can regain momentum.”


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

by 14.8

per cent to

14,144 in April, to be up by 21.3 per cent on the same month in the previous year.


Private sector house approvals fell

by 13.5

per cent to

8,404

to be up 4.7

per cent on the

same month last year. 


The more volatile private sector ‘other dwellings’ (apartments and townhouses), fell by 5.4

per cent in April to be up 42.3 per cent on April 2009.


Public sector dwelling units

fell by 42.4 per cent in April, to be 168.4 per cent higher than

the same month last year.


For further information:

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






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