The fact that building approvals have continued to fall, reinforced the importance of yesterday’s announcements regarding a Housing Recovery Plan and a further interest rate cut.
HIA’s Acting Victorian Executive Director Robert Harding said federal and state first home buyer incentives had assisted in increasing demand in December. “The results would have probably been more dire, had the generous grants for Victorians not existed,” Mr Harding said.
HIA chief economist Harley Dale said the $6.4 billion Housing Recovery Plan announced yesterday by the Federal Government will be crucial in boosting residential construction activity and jobs in 2009.
“This plan together with the sharp drop in interest rates gives cause for optimism that home building activity will stabilise and subsequently recover over the course of 2009,” Harley Dale added.
“Approvals are at their lowest level since the post-GST slump. Rapid implementation of the Commonwealth-approved tender process for the spot purchase of private sector new dwellings will be needed to spark residential building and wider economic activity.”
Detached house approvals fell by 2.5 per cent in December and were down by 11.2 per cent over the quarter. Multi-unit approvals were even weaker, falling by 3.8 per cent in the month to be off by 26.3 per cent in the December 2008 quarter.
For the month of December residential dwelling approvals increased by 12.3 per cent in Western Australia, 2.7 per cent in Victoria, and 0.6 per cent in Queensland. Approvals fell by 8.3 per cent in South Australia, 9.5 per cent in Tasmania, and 10.4 per cent in New South Wales. In trend terms, approvals were up by 3.7 per cent in the Northern Territory but were down by 17 per cent in the ACT.