The Australian Bureau of Statistics (ABS) figures don’t lie and for the housing industry that means great news, as the ABS revealed that in October building approvals across Australia reached record levels. The value of these approvals was a staggering high of $7.61 billion; residential building also reached record highs. Over in the retail investment property market the news was just as amazing; this sector hit $1.5 billion worth of transactions in October and November, bringing the market closer to another stand-out year.
Overall building approvals are up 23.1 per cent since the beginning of 2013. It is extraordinary to see housing construction driving economic growth to such an extent that it even passed the influence of the mining industry. The chief economist at CommSec, Craig James, says the ABS data proves building construction’s increasing importance as a prime mover of the Australian economy. “Simply, supply (the construction of new homes) is lifting to meet demand, putting downward pressure on prices.”
James took the opportunity to urge the Reserve bank of Australia to keep interest rates on hold. Over at RBS Morgans the Director of Strategy, Michael Knox, believes that if this happens and rates continue to stay low for the next couple of years that the property market will grow an even more important role in the Australian economy. He believes the economy is in a “growth recession” and “it is the housing sector that, for the first time in half a generation, we will be relying upon to get us out of this growth recession”.
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