Industry uninspired by building approvals
A rise in building approvals during the month of November has done little to inspire the confidence of some professionals within the local building and housing industry.
According to the latest data from the Australian Bureau of Statistics (ABS), building approvals rose by 8.4 per cent in November following a 10 per cent drop in October and a 14.8 per cent fall in September.
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Detached house approvals rose by 4.9 per cent in November while approvals for other dwellings rose by 16.1 per cent.
Despite the increase, total November approvals are still down by 18.9 per cent when compared to the previous year.
"At least today's approvals update is on the right side of zero growth, but the level of total approvals remains weak and serves to reinforce the need for further interest rate cuts in the first half of 2012," Housing Industry Association senior economist Harley Dale said.
"Further rate cuts are absolutely essential to shore up homebuyer confidence in light of global economic conditions and to help ameliorate the effects of the increased consumer cautiousness that has pervaded the Australian economy since the GFC.
"Building approvals over the three months to November 2011 imply an annual level of housing starts of under 130,000. That is lower than the level reached in GFC-affected 2008/09 and strengthens the case for urgent government action in addition to further rate cuts."
Master Builders’ chief economist Peter Jones said the building industry is banking on further rate cuts to help boost confidence and stabilise an uncertain market.
"Master Builders Australia believes that the November and December rate cuts by themselves won't be enough and calls on the Reserve Bank to lower rates further to reignite activity in the building industry," Mr Jones said.
"Builders are reporting falling sales and forward orders as consumer caution, European economic woes and difficulties accessing finance work against any recovery."
