August building approval figures do not provide any insight on when a sustainable recovery in Australia’s new home building sector will emerge, according to the Housing Industry Association.
HIA Chief Economist Harley Dale said it was pleasing to see a headline rise in seasonally adjusted building approvals for the month of August 2012 – up by 6.4 per cent.
"However, the narrow base - a 22.5 per cent rise in approvals for 'other dwellings' which only partially recovers the 46.5 per cent loss of the previous month - is obviously less than ideal," Dr Dale said.
“Furthermore, approvals for other dwellings are still substantially lower than a year ago (-28.4 per cent). This profile for building approvals highlights the long road ahead to achieve a robust and sustainable new housing recovery," he said.
"The remaining four months of updates for building approvals for 2012 will be crucial, because right now there is no compelling evidence pointing to us being on the cusp of a new housing recovery.
"Without evidence emerging soon of a sustainable recovery in leading indicators such as building approvals the prospect of a third consecutive yearly decline in dwelling commencements, from a starting point of recessionary levels, will come into play," Dr Dale said.
In August 2012 total seasonally adjusted building approvals increased by 30.3 per cent in Victoria, 16.1 per cent in Western Australia, and 1.8 per cent in Queensland.
Building approvals fell by 18.3 per cent in New South Wales and were down by 1.1 per cent in South Australia and 1.2 per cent in Tasmania. In trend terms building approvals in August increased by 1.4 per cent in the Northern Territory but fell by 10.8 per cent in the Australian Capital Territory.