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HIA: Australia’s building approvals remain below early 2010 level

KUALA LUMPUR: The Australian Bureau of Statistics (ABS) Building Approvals posted their first increase in four months in July, but remained below the early 2010 levels, said the Australian Housing Industry Association (HIA).

HIA, known as the voice of Australia’s residential building industry reported its chief economist, Dr Harley Dale saying that a modest 2.3% increase in building approvals was seen in July 2010 driven by a 6.5% lift in ‘Other dwellings’. Detached house approvals were flat for the month.

"This was the first rise in approvals for other dwellings since March and largely reflected semi-detached dwellings and units of four or more storeys," said Harley Dale, but was quick to add that overall building approvals remain soft in mid-2010 "falling over the three months to July".

According to HIA, over the three months to July 2010, the total building approvals were down by 11%, which reflected a 17% drop in other dwellings and a decline of 8% for detached houses. Dale said that that the on-going downward trend for building approvals indicates that a first stage recovery in housing starts in 2010 will fail to gather traction next year.

"That lack of a sustainable recovery reflects higher interest rates, the unwinding of fiscal stimulus, and the considerable supply side obstacles to new housing which include a dire lack of available finance,” he said, adding that the weak profile for leading housing indicators over 2010 to date supports the case for steady interest rates.

"It also highlights the need for a re-doubling of efforts to reduce the impact of regulation, development charging, and excessive taxation on the cost of new housing supply," Dale said.

In July 2010, building approvals increased in six out of eight states and territories.The number of seasonally adjusted building approvals increased by 12.1% in Victoria, 9.7% in New South Wales, 8.2% in South Australia, and 4.5% in Tasmania.

Approvals also increased by 13.4% in the Northern Territory and by 2% in the Australian Capital Territory. Meanwhile, approvals fell by 18.3% in Queensland and were down by 4.9% in Western Australia.
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