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Building approvals look positive despite fall

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31 October 1996

3 rd 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

BUILDING APPROVALS LOOK POSITIVE DESPITE FALL Statement by Wilhelm Harnisch, National Director, Economics and Housing

The September building approvals data, despite falling by 8.6 per cent (seasonally adjusted) over August still provides a positive signal that the impact o f lower interest rates and competitive housing packages is starting to revitalise what has been a stagnant housing market.

Over the past four months, much o f the increase in building approvals was generated by the apartment sector in the major capital cities but which fell by 29.6 per cent in September. Apartments and townhouses represent around 25 to 30 per cent o f the new housing market.

The positive data in the September building approval figures lies in the 2.8 per cent increase in the number o f private sector houses approved compared to the previous month and which has now started to show a positive trend albeit still relatively flat. It is this segment o f the market that needs to pick up further before the housing recovery will gather any strength. While the 2.8 per cent increase is welcome, it does show that the private house sector still remains sluggish and that this group o f home buyer is still to respond more fully to the interest rate cuts. Many are waiting for more positive signals in the broader economy before committing themselves to home ownership.

The September quarter building approvals shows that the housing market is still anaemic and only strengthens the case for an early cut in interest rates by the Reserve Bank which is due to meet next Tuesday.

For further information contact:

Wilhelm Harnisch

M aster Builders

Australia Incorporated

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

South Australia with

limited liability

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