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Release by the ABS of December [1995] residential building approvals statistics



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MINISTER FOR HOUSING AND REGIONAL DEVELOPMENT BRIAN HOWE

BH030/96 31 January 1996

RELEASE BY THE ABS OF DECEMBER RESIDENTIAL BUILDING APPROVALS STATISTICS

The marginal fall in today's residential building approvals figures for December suggests the rate of decline of the downturn in housing industry activity has now reached a trough. The overall trend remains subdued but is expected to pick up in 1996-97.

Mr Howe, the Commonwealth Minister for Housing and Regional Development, was commenting on the release by the Australian Bureau of Statistics of residential building approval figures for December 1995. These figures show that the-number of residential building approvals fell in seasonally adjusted terms by 0.4 per cent to

10,342.

The trend estimate, a more reliable indicator of activity, showed private sector house approvals falling marginally in December by 0.8 per cent following adjusted falls of 1.1 per cent in November and 1.3 per cent in October. The trend for total dwellings also fell in December, falling by 0.6 per cent after a 1.4 per cent decrease in November. The trend estimate for total dwelling approvals has now

been in decline since August 1994, as the industry adjusts to lowered demand levels

The strong levels of housing activity from 1992-93 to 1994-95 have absorbed the pent-up demand that existed in the market and created an oversupply of dwellings. Over these strong years of growth, a record of 514,600 dwellings were built. The

housing industry is now undergoing a period of adjustment as activity falls below the-levels otunderlying requirements for new dwellings to absorb the oversupply_

Oversupply estimates of around 49,000 dwellings at 30 June 1995 are dampening activity levels overall. The oversupply, however, is an aggregate figure and masks regional differences which vary considerably.

The latest trend estimates for building approvals are consistent with forecasts by the Indicative Planning Council for the Housing Industry (IPO), the Government's premier advisory body on housing activity. The IPO expects a significant decline in activity from the 169,650 commencements recorded in 1994-95. The Council forecasts 124,000 commencements in 1995-96, recovering moderately to 133,000

in 1996-97 as oversupply is progressively absorbed.

For further information: Andrew Casey, Brian Howe's Office, 018 626 594