While residential building approvals rose solidly in August, the housing industry remains incredibly volatile, according to the Housing Industry Association.
Data from the Australian Bureau of Statistics, released yesterday, found building approvals rose by 11.4 per cent in August, driven by a 31 per cent increase in the “other dwellings” segment of the market.
But while overall building approvals rose, detached housing was down by 0.4 per cent for the month and unfortunately this gives a better indication of the inherent weakness that exists within the new home building industry at the present time,” HIA senior economist Andrew Harvey said.
“In the three months to August 2011 detached house approvals are down by 4.4 per cent, reflecting the fact that interest rates are too high and consumers are increasingly cautious given volatility in the global economy and weakness in the non-resource domestic economy.
“The constraints on the supply side of the housing market, which includes excessive taxation, continue to sit as the elephant in the room when it comes to discussion over why Australia does not build enough houses each year.
“However, it’s encouraging to see some life in the “other dwellings” segment and also to see that much of the aggregate increase is due to a lift in NSW. Total NSW approvals leapt from 2,606 in July to 3,785 in August, a remarkable monthly increase of 45.2 per cent. This means that NSW accounts for 1,179, or 83.3 per cent, of the 1,416 total increase in approvals across Australia throughout August.”