Building approvals in the 12 months to December increased by 2.7 percent, the first increase in Eighteen months, the ABS reports. The outcome was better than expected analysts had forecast a 1.4 percent fall.
The growth was generated by apartments and townhouses in the private sector, which increased by 4.9%. Houses in the private sector grew by only 0.3%. Housing approvals improved 6.1 percent for Victoria 4.7 percent for NT, 1 percent for ACT, 0.5 percent for NSW and 0.5 percent for SA. Drops in Tasmania, WA and Queensland were registered.
Construction approvals gradually stabilized in 2019 due to the cash crunch and speculation about property taxes ahead of the Federal Election after dropping 20 percent in 2018.
Housing Industry Association economist Angela Lillicrap says: “The market did improve in the final months of 2019, suggesting that the building industry will not continue to constrain economic growth in 2020. New home building has stabilised at relatively strong levels.”
Ms. Lillicrap said while continued growth in house prices will assist in bringing property investors back to the market and support higher building activity in 2020, restrictions on foreign investors mean it will be unlikely to result in the same boom as experienced in the previous cycle.