By
Building approvals data for July show stronger performance in the residential construction sector, but patches of weakness persist, according to the Housing Industry Association (HIA).
"Following on from June's disappointing figures, the results for July indicate that the prevailing trend in the sector is one of recovery," says HIA senior economist, Shane Garrett.
In July, total approvals rose by 10.8% compared with the previous month. This comprised 3.5% growth in detached house approvals and 23.3% growth in approvals for multi-unit dwellings.
“However, if we take a long view, we see that activity in multi-units is under pressure,” says Garrett. “If we look at the three months to July 2013, multi-unit approvals fell by 8% compared with the same period of last year.”
Garrett adds that the HIA are ‘disappointed’ by fallen approval rates in states like New South Wales and Queensland and says the direction of new home building in these key states means the pace of recovery is still fragile.
“On the other hand, it is encouraging to see approvals start to pick up in states like Tasmania, Victoria and South Australia. The general trend of improvement in residential construction is proof positive that the RBA's rate cuts are slowly fostering expansion in parts of the housing industry. We look forward to further movement on rates in the coming months.”
In July 2013, total seasonally adjusted building approvals increased in Tasmania (+24.7%), Victoria (+22.2%), the ACT (+12.6% - trend terms), Western Australia (+9.8%), South Australia (+9.7%) and the Northern Territory (+4%). Residential building approvals fell in New South Wales (-6.7%) and Queensland (-4%) during July, in seasonally adjusted terms.
