More Approvals for Home Construction
The impact of record low interest rates is being felt as construction rates of new homes exceed expectations.
Across Australia in the month of July an increase in building approvals of 10.8% was observed. According to Australian Bureau of Statistics figures, a 28.3% increase in building approvals was observed across Australia over the year to July. This was significantly more than the 4% rise for July anticipated by economists.
Ivan Colhoun, ANZ Chief Economist, warned that while this data seems encouraging, it is volatile because of the number of approvals given for large apartment buildings. He also commented that an encouraging uplift is evident and is particularly being led by NSW.
The good rates of home approvals followed the RP Data-Rismark Home Value Index, which showed an increase of more than 5% in the 12 months to August in the prices of homes in Australian capital cities.
CommSec Economist, Savanth Sebastian, is of the opinion that this is further evidence of the recovery of the housing market. He claimed that the combination of record-low interest rates, a strong growth of population, healthy employment levels and an increase in housing demand are all contributions to the resurgence of the property and housing market.