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Further growth in building approvals - HIA



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F O R I M M E D I A T E R E L E A S E

July 1, 1999

FURTHER GROWTH IN BUILDING APPROVALS - HIA

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Building approvals in Australia continued to rise in May confirming the robust nature of the current housing cycle.

Australia's peak building industry body HIA says the 3.5 per cent rise in seasonally adjusted approvals for new homes in May released by the Australian Bureau of Statistics today was further proof that the combination of high levels of affordability and pre-GST buying decisions is keeping new home construction activity strong.

HIA says that while approvals for the normally volatile “other dwellings" sector fell by 15.8 per cent in May, private sector house approvals grew by 13.2 per cent. This growth has led to the seventh consecutive rise in the trend for approvals in this sector.

HIA’s Managing Director, Dr Ron Silberberg, says that today’s figures coupled with the strong growth in new home lending over the past 6 months, particularly for the construction of new houses, will continue to favour the nations home builders until the end of the year.

“The current strong levels of activity we are seeing are a combination of many factors. Obviously the GST is pulling forward some demand for new housing but this is in an environment where interest rates are low, affordability is high, and consumer confidence is increasing” Dr Silberberg said.

"These factors, in addition to stable building materials prices should see the housing sector remain strong to the end of the year”

All States apart from Victoria and Tasmania recorded a monthly lift in seasonally adjusted dwelling approvals with South Australian approvals up 21.1 per cent in May, WA up 10.0 per cent, OLD up 2.7 per cent and NSW up 0.5 per cent.

In Victoria, building approvals fell by 3.9 per cent during May and in Tasmania, they were down 26.2 per cent.

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Housing Industry Association Limited ACN No 004 631 752

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Further Growth in Building Approvals - HIA

DWELLING APPROVALS - May 1999 Seasonally Adjusted (Number)

NSW VIC OLD SA WA TAS AUSTRALIA

May-99 4256 3543 2270 722 1899 90 12,875

Apr-99 4236 3688 2210 596 1726 122 12.432

May-98 4226 3243 3085 619 1637 132 13,188

% change Change on previous month 0 5 -3 9 2.7 21 1 10 0 -26 2 3 6

Change on same month a year ago 0 7 9 3 •26 4 16 6 16 0 -31 8 -2.4

DWELLING UNITS APPROVED. AUSTRALIA AND STATES Seasonally Adjusted (Number)

NSW VIC OLD SA WA TAS AUSTRALIA

3 months to May 99 12.'40 10.543 6.896 1.973 5.311 334 38.066

3 months to February 99 12.826 10.441 7,192 1.929 5.005 346 39.126

3 months to May 98 13.724 10.187 9.347 1.819 4.929 388 40,699

% change Change on previous 3 months -0 7 1 0 -4.1 2 5 6 1 -3.5 -2.7

Change on same 3 months a year ago -7 2 3 5 -26 2 8.7 7 8 -13 9 -6 5

FURTHER INFORMATION: Please contact Dr Ron Silberberg, Managing Director on 0417 261 560 or Ruth Morschel, Director Research and Policy on 0417 691 815