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Strong Housing Approvals In August

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ABS figures released today show that while approvals for multi-unit buildings weighed on the overall result, approvals for detached house building remained strong in August, said the Housing Industry Association.

In August 2015, the total number of new homes approved for building declined by 6.9 per cent in seasonally adjusted terms from level in the previous month. Approvals declined during the month despite growth of 4.4 per cent in detached house approvals. It was a 16.9 per cent fall in multi-unit approvals that considerably outweighed the uplift on the detached house side.

Compared with 12 months ago, activity is still higher on both sides of the market. Detached house approvals increased by 3.0 per cent compared with August of last year, while multi-unit approvals have seen growth of 8.6 per cent over the same period.

“Australia’s new home building market saw record levels of activity during 2014/15, with new dwelling commencements totalling about 215,000,” noted HIA Senior Economist, Shane Garrett.

“We project that new home building will ease back during the 2015/16 year, so the slowdown in building approvals is unsurprising in this context.

“The residential construction sector as a whole is facing strong headwinds in the form of tight land supply conditions in key markets, planning delays, and the unfavourable effects of recent credit restrictions.

“Residential building is making a vital contribution to growth in the domestic economy at this time, and it is important that we see prompt policy solutions to deal with the problems of land supply and the taxation burden on the sector. This will allow the housing industry to play its full part in driving our economy forward."During August 2015, total seasonally adjusted new home building approvals increased in South Australia (+27.9 per cent), Tasmania (17.3 per cent), Western Australia (+6.9 per cent) and Queensland (+4.5 per cent). Seasonally adjusted approvals declined in New South Wales (-28.5 per cent) and Victoria (-0.7 per cent). In trend terms, approvals increased by 8.3 per cent in the Australian Capital Territory but declined by 0.7 per cent in the Northern Territory.

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