Friday, February 3, 2012
Approvals for new high-rise units in the six months to December slumped to less than half the level of a year earlier, as building approvals continue their downward spiral.
But the Bureau of Statistics reports that in 2011 Victoria again dominated Australian home building. For the second year in a row, 35 per cent of all new homes approved in Australia were to be built in Victoria, which has just 25 per cent of the population.
In the rest of Australia, approvals for new homes are at their lowest level since the depths of the financial crisis. Bureau trend estimates show just 11,189 homes approved, down 19 per cent in a year.
The federal government's stimulus has ended with a thud. Just 139 public sector homes were approved in December, fewer than in any month since records began in 1983, and probably since World War II, when home building virtually halted.
The best news is that trend approvals for private sector houses are flattening, after a two-year fall since the Reserve Bank began raising interest rates. But at 7400 new homes a month, they are well below estimates of underlying demand.
Just 149,076 new homes were approved in 2011, down from 176,564 in 2010. Experts estimate Australia needs 220,000 new homes a year.
Victorian approvals fell from a record 62,198 to a still strong 52,056. But by the end of the year the brakes were on, especially in the most volatile sector, high-rise apartments.
Approvals for new high-rise apartments in Victoria (virtually all in Melbourne) jumped from 3766 in the second half of 2009 to a record 8623 a year later. By the second half of 2011 they were back to 4243, still a high level. Approvals for low-rise apartments and units remain close to the record highs recorded in 2010.
The industry seized on the weak national figures to call for another interest rate cut when the Reserve Bank board meets next Tuesday. Financial markets estimate an almost 80 per cent chance the board will cut rates.
The bank yesterday promoted senior insider Dr Christopher Kent to be assistant governor (economics), in effect the chief economic adviser to governor Glenn Stevens and the board.
Dr Kent, formerly the bank's research chief, will replace Dr Philip Lowe, who becomes deputy governor on Valentine's Day. Previous occupants of his job include Mr Stevens and his predecessor as governor, Ian Macfarlane.