The rise in dwelling commencements in the March quarter is a sign that the trough in the industry may be behind it as the impact of last year's interest rate hikes begins to fade, according to building and construction industry body Master Builders Australia (MBA).
MBA's Chief Economist Peter Jones said that house builders are becoming more optimistic that the industry can improve, particularly as this figure predates the good news on consumer price inflation and reduced interest rate speculation.
"At the national level commencements are still running way below underlying dwelling requirements, so a sustained upswing is needed to alleviate rising pent-up demand for housing," Mr Jones said.
"There are some encouraging signs for NSW, with the trend starts rising in the past two quarters after two and a half years of decline."
Mr Jones commented that the industry still faces "headwinds of poor affordability and a lack of investor logic in the private rental market."
The total number of dwellings commenced in the March quarter 2007, seasonally adjusted, rose by 1.3 cent to 38,639 to be 0.3 per cent lower than the March quarter 2006.
The number of private new houses commenced fell by 0.9 per cent to 26,127 units, 2.7 per cent higher than a year earlier.
Commencements of other dwellings (including apartments) rose by 5.3 per cent in the March quarter to be down by 6.8 per cent through the year.
