Increase in dwelling approvals not all positive

While Victoria saw the biggest increase, 31.8 per cent, New South Wales and Western Australia also saw big jumps, of 25.1 per cent and 24.8 per cent respectively.

South Australia saw an increase of 16.2 per cent, with Queensland recording a 10.3 per cent jump.

Overall, however, private sector houses rose 8.7 per cent in May, with the total value of buildings approved jumping by 43.4 per cent. This is on the back of declines over the previous three months. Of this, residential building rose 26.8 per cent.

The statistics were particularly welcomed by the Victorian Government, who said that this is a positive sign of growth for Victoria’s property sector, despite a weaker national economy and global market challenges.

"The total value of building work approved rose by 10.2 per cent in May 2012 and is up 12.4 per cent over the year,” said treasurer Kim Wells.

"The growth in residential approvals in Victoria shows confidence in the strength of our economy," Mr Wells said.

"In May there were 4,156 dwellings approved in Melbourne compared to 2,859 dwellings approved in Sydney."

He pointed to regulatory reforms currently being undertaken by the state government to boost the construction activity.

"We have made additions to the urban growth boundary to free up land supply and we have put policies in place to identify appropriate places for urban development.

"The Coalition Government is also delivering on its election commitment to cut stamp duty by 50 per cent by 2014 for eligible first home buyers,” he said.

Master Builders in Queensland also welcomed the ABS’ findings, saying that after a fall of 11.6 per cent in Queensland last month, a rise of 12.3 per cent was much needed.

However, the organization pointed out that while the results are a positive, they are still lacking well below pre-GFC averages.

The Housing Industry Association also said that the result for Tasmania is “abysmal” with a 12 per cent decline in housing approval numbers.

Executive director Stuart Clues said that there has been consistent declines across the board for Tasmania over the last year, including in housing starts and finance approvals.

“HIA is calling upon both State and Federal Governments to recognise that an ailing housing sector is a dire warning signal as to the health of the wider economy and they need to step in a stabilise the market, build consumer confidence and create and environment for investment,” Mr Clues said.

“Building approvals [nationally] were up by a sizeable 27.3 per cent in May 2012. This result provides some hope of an improved new home building outlook emerging in time and delivers preliminary evidence that recent interest rate cuts may be starting to have an impact,” said Stuart Clues.

“However, we need to keep in mind that the result comes off a very low base in April and is driven by the highly volatile multi-unit part of the market. The level of approvals in the core segment of detached housing remains well below the levels recorded one year ago.”

While multi-unit approvals saw a 58.3 per cent jump in May, up by 41.5 per cent on the same month in 2011, detached housing approvals were up only 9 per cent in May, down 8.5 per cent when compared to May 2011.