New Home Building Improves

Building approvals rose 2.7% in the 12 months to
December, the first rise in 18 months, says the ABS.
The result was better than expected – economists
had predicted a decrease of 1.4%.

The increase was driven by private sector units and
townhouses, which rose 4.9%. Private sector houses
rose only 0.3%.

Dwelling approvals rose 6.1% Victoria, 4.7% in the
NT, 1% in the ACT, 0.5% in NSW and 0.5% in SA. Falls
were recorded in Tasmania, WA and Queensland.
Building approvals slowly recovered in 2019 after
falling 20% in 2018 due to the credit squeeze and
uncertainty around property taxes ahead of the
Federal Election.

Housing Industry Association economist Angela
Lillicrap says: “The market did improve in the final
months of 2019, suggesting that the building industry
will not continue to constrain economic growth in
2020. New home building has stabilised at relatively
strong levels.”

She says the continuation of price growth in capital
cities will bring investors back to the market and
support higher building activity in 2020.