As figures show that house approvals increased slightly in September 2005 but were down by 6.4 per cent on a year earlier, the Reserve Bank of Australia (RBA) gave the nation's housing market a definite nod of approval in its quarterly statement on monetary policy.
According to figures released this week by the Australian Bureau of Statistics, house approvals rose by just 1.8 per cent in September, boosted by approvals for apartments, which rose by 15.5 per cent. Detached house approvals fell by 3.2 per cent following a 4.9 per cent drop in August.
The central bank noted that house prices have remained fairly stable, while recent auctions' data is consistent with conditions in the housing market remaining subdued. "Over the past few months, clearance rates in Sydney and Melbourne have fluctuated around levels considerably lower than their averages over the past five years, and auction volumes remain low."
"Nonetheless, with further large amounts of work yet to be done, especially in the more buoyant states, the current downturn in house building activity is likely to be shallow by the standards of previous cycles," the RBA said.
Beyond the volatility, housing indicators remain weakest in New South Wales and Victoria, while conditions in other states have been firm, the RBA reported, noting that forward-looking indicators of housing activity point to some near-term easing in construction.
"The number of building approvals declined by 12 per cent in the September quarter, with falls in approvals for both houses and medium-density dwellings. Nonetheless, with further large amounts of work yet to be done, especially in the more buoyant states, the current downturn in house building activity is likely to be shallow by the standards of previous cycles", said the RBA.
For September, dwelling approvals increased in New South Wales, up 8.9 per cent, the Northern Territory, up 8.3 per cent, Tasmania, up 7.6 per cent, Victoria, up 5.8 per cent, and Queensland, up 4.9 per cent. Approvals were down by 4.5 per cent in South Australia, 6.1 per cent in the Australian Capital Territory, and 9.9 per cent in Western Australia.
