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Jump in building approvals welcome



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2 December 1996

3 r d F lo o r

C o n s t r u c t i o n H o u s e

2 1 7 N o r t h b o u r n e A v e .

T u r n e r , C a n b e r r a

A C T 2601 T el: (0 6 ) 2 4 9 1433

F ax: (0 6 ) 2 4 9 1373

JUMP IN BUILDING APPROVALS WELCOME Statement by Wilhelm Harnisch, National Director, Economics and Housing

The increase o f 12.8 per cent in the total number o f dwelling units approved (seasonally adjusted) in October is obviously a welcome increase for the building industry. The increase will be particularly welcome news for building material suppliers who have seen poor trading conditions over the last twelve months.

The increase in October is entirely due to the massive 68.4 per cent jump in 'other residential' dwelling units. While this sector is continuing to attract investors and people who wish to live in inner city areas, particularly in Sydney and Melbourne, the volatile nature o f this category o f approvals is distorting the building approvals series.

The increase in October shows that the housing recovery is patchy and needs to broaden before the industry overall can claim that it has entered a period o f sustained recovery.

The number o f private sector houses approved in October disappointingly fell by 6.4 per cent following an increase o f 2.8 per cent in the previous month. The fall is disappointing in that the previous cut in interest rates and the subsequent fierce competition in home lending has failed to sustain the interest o f new home buyers. It is hoped that the November cut in official cash rates and subsequent further reduction in mortgage interest rates will help boost home buyers confidence and help to strengthen activity in the private sector house market.

For further information contact:

Wilhelm Harnisch

BH: (06) 249 1433 AH: (06)288 9650

Master Builders

Australia Incorporated A.R.B.N. 008 383 453

Incorporated in

South Australia with

limited liability