Rate cuts fuel home building rise

by Lena Woods21 Jan 2013

The ABS Building Activity update for the September 2012 quarter shows a 2% lift in new home commencements, according to the Housing Industry Association (HIA).

HIA economist, Geordan Murray, says the increase in dwelling commencements in the September, 2012 quarter is the second consecutive quarterly improvement.

“With 37,027 commencements, this is the strongest quarterly result in over a year and no doubt assisted by the 75 basis points cut from the official cash rate over May and June last year.”

In seasonally adjusted terms, the number of detached dwelling commencements increased by 4.3% in the first quarter of the 2012/13 financial year, although remains slightly below (-1.4%) the level of a year ago.

There was decline of 1.3% in the number of multi-unit dwellings commenced in the quarter, but the level remains 5.1% higher than the level recorded in the corresponding quarter a year ago.

“New South Wales posted an encouraging result with a 9.5% increase in commencements in the quarter, although it is likely to be influenced by changes to government incentives that occurred around this time. The headline result was underpinned by a substantial 18.8% lift in detached dwelling commencements as well as a 1.8% lift in multi-unit commencements.”

Taking a look around the other states, dwelling commencements (seasonally adjusted) increased in Victoria by 2.9% and in Western Australia by 23.6%. The number of commencements fell by 14.2% in Queensland, 9.4% in South Australia, 0.4% in Tasmania, 29.9% in the NT and 3.3% in the ACT.