Dwelling prices grow more than 10% for year to August: NAB
Momentum in the economy is stretching across the non-mining economy beyond the dwelling sector, according to National Australia Bank group chief economist Alan Oster.
In the latest Bigger Picture – A Global & Australian Economic Perspective report he said household consumption growth is expected to remain below trend and is reliant on a decline in the household savings ratio which is vulnerable at present to weak consumer confidence.
"Against that, there is increasing evidence that growth momentum is broadening across the non-mining economy – not limited to the dwelling sector – in response to the lower AUD and interest rates, with improvement particularly evident in services sectors," he said.
"Residential markets remain strong, with dwelling prices continuing to grow more than 10% over the year to August.
"Surprisingly, dwelling investment surprisingly fell by 1.9% in Q2 despite strength in building approvals and a very elevated stock of residential projects in the construction pipeline. While this did follow growth of over 6% in each of the two preceding quarters, this weakness is likely only temporary given record levels of work to be done. "
