Australia Sets Record High Approvals for New Home Buildings, Data Shows
In line with the latest data from the Australian Bureau of Statistics, as published in PropertyWire, Australia recorded its strongest year ever for new home approvals. For the year, the numbers grew higher by 13.7 percent during 2015.
However, the volume fell 4 percent by the end of the year, though there were variations based on housing type. In 2015, the approvals for flats had increased 30 percent but fell 1 percent for detached houses.
Shane Garrett, the senior economist for the Housing Industry Association, remarked that a year ago a total of 232,078 new homes got approved for building, which is higher for every calendar year on record.
He said, "New home building has been a crucial support to economic growth over the past two years, particularly in light of the mining investment downturn. The challenge during 2016 will manage the transition to lower volumes of new home building in an orderly fashion."
According to the latest sales report of Housing Industry Association, a confluence of factors had driven the loss of leading indicators for new home construction.
HIA chief economist Harley Dale said, "The lagged effect of slowing population growth, an up-tick in variable mortgage costs, over reach on the part of APRA's credit controls, and an easing in property price growth in Sydney and Melbourne are all in play."
In another interview of Shane Garrett by ABC News, he said that the latest ABS figures released had to ease the concerns about the residential construction boom since 2014 will continue.
"Residential construction was the economy's good news story during 2014, and today's figures indicate that we can look forward to another positive year for the industry," Garrett said. He added, "The fact that approvals hit an all-time high during November augers very well for the pipeline of residential construction work in 2015."
Meanwhile, Diana Mousina, an economist from Commonwealth Bank, said that the approval data would surely drive the number of new homes for construction to above-average levels this year.
"On our forecasts, dwelling commencements in 2014 should total 191,000 and 186,000 in 2015. Such outcomes would represent a significant improvement on the 150,000 average of the previous seven years," she mentioned.