Rate cuts and apartment shift fuel home building surge

  • feed
  • Google+
by |

New home building approvals in Australia rose slightly in November thanks to a continued shift to apartment living, while many expect lower mortgage rates and a growing population to signal further recovery this year.

Australian Bureau of Statistics data shows building approvals increased by 2.9% in November, up 13.2% on the same month of 2011.

All gains came in the multi-unit sector, which climbed 10% in November and over 36%  for the year.

The RBA is counting on a recovery in the housing market to boost the economy if the current boom in mining investment starts to crest later this year.

Home building and renovation is worth around A$68 billion a year in Australia, according to news.com.au - a little less than 5% of annual economic output - but it can swing sharply from year to year, making an outsized impact on growth.

After a series of rate cuts last year, mortgage rates are now well below long-run averages. Combined with flat home prices and rising incomes, that has made property more affordable.

Australia's population is also expanding at the fastest pace in almost three years. The population grew by 1.6% in the year to June, 2011 up from 1.14% the previous year.

The Housing Industry Association also reports sales of new homes rose 4.7% in November, for a second straight month of gains.

  • Construction lender on 15/01/2013 9:18:33 PM

    Hmm Im not so concerned about the NCCP affecting Constuction industry. I have met with HIA as a number of my referrers are builders. Of 30 Construction Valuations in the last 12 months, only 1 valued up. Apparently the gold coast is about to experience a tsunami which will swallow all property to the hinterland..

  • sidbroker on 14/01/2013 11:39:30 AM

    DO THE HIA APPRECIATE HOW BADLY NCCP DESTRUCTIVELY IMPACTS ON THE BUILDING INDUSTRY YET?

Australian Broker forum is the place for positive industry interaction and welcomes your professional and informed opinion.

Name (required)
Comment (required)
By submitting, I agree to the Terms & Conditions