Housing approval rates soared in May, according to data from the Housing Industry Australia (HIA).
Building approvals were up by 27.3% in May, with WA and SA rebounding the most after a weak April period.
HIA’s senior economist Andrew Harvey confirmed the cash rate cuts over April and May contributed to the robust numbers.
“[It] delivers preliminary evidence that recent interest rate cuts may be starting to have an impact,” he said.
However, he warned that activity was still troublingly low within the core segment of detached housing, and levels were “well below the levels recorded one year ago.”
Multi-unit approvals were up by 58.3% compared to a modest 9% growth in detached housing.
Meanwhile, economists are now speculating whether RBA
’s unchanged rate will see more bouyant housing data plateau in coming months.
“One can only hope this is not taken for granted by the Reserve Bank. It would be a great disappointment to see the recent improvement in buyer sentiment was not shown to be sustained,” said Ray White Group’s Brian White.