Building approvals hit two-year high
Homebuilding approvals are heading in the right direction, opening up the possibility of more residential construction activity in the near future.
A total of 16,579 approvals were issued in January, according to the Australian Bureau of Statistics. This marked a 6.3% month-on-month increase and 21.7% year-on-year increase, and was also the highest monthly total since December 2022.
“These increases in approvals signal positive momentum heading into the new year, with households slowly returning to the market and building new homes,” Housing Industry Association economist Maurice Tapang said.
“New housing approvals had been strengthening on the back of low levels of unemployment, recovering real wages and ongoing strong population growth, even before the first interest rate cut was delivered [in February].”
Master Builders Australia chief economist Shane Garrett also welcomed the increase in approvals numbers, but warned that without a further rise, housing supply would continue to fall short of demand.
“Higher-density home building has been at woeful levels for nearly a decade with insufficient new supply in this part of the market forcing rental prices sky high,” he said.