Dwelling approvals on the rise during March quarter
Data from the Australian Bureau of Statistics (ABS) shows that new home construction is still going strong.
Figures released on May 5 point to a 7.7 per cent increase in detached house approvals over the March quarter on a seasonally adjusted basis.
"Building approvals for the month of March 2014 are consistent with healthy growth in new home building activity this year, although the approvals cycle itself may well have peaked," said HIA Chief Economist Dr Harley Dale in a May 5 media release.
"New home building has a large reach into the wider domestic economy and the sector is very much Australia's economic barometer in 2014. If you're searching for highlights to the Australian economy, new housing is the best shot you can take."
Mr Dale went on to point out that market activity has shifted away from multi-unit dwellings and toward detached houses.
On a state by state basis, seasonally adjusted building approvals rose highest in Tasmania, which experienced a 33.1 per cent increase. This was followed by New South Wales with an 8 per cent rise.
Approvals stayed the same in South Australia, but decreased in Victoria (-12.5 per cent), Queensland (-3.3 per cent) and Western Australia (-9.1 per cent).
In trend terms, building approvals rose 0.7 per cent in the Australian Capital Territory but fell 25 per cent in the Northern Territory.
More construction benefits both investors and traditional home buyers, as a larger inventory typically translates to reduced home prices.
With this in mind, savvy investors would be wise to focus their search in areas where home building is strong.
Additionally, Australians should begin looking into home loans for investors while interest rates remain low.
Whether you intend to purchase property as part of a self-managed super fund investment or on your own, now may be the right time to enter the market.