RBA's desired lift in non?mining construction emerging in building approvals
The residential construction upturn is now underway - with the RBA's desired lift in non?mining construction confirmed in the ABS building approval figures issued Monday.
At the end of last year, 17,461 units were under construction in Melbourne and 21,546 had been approved.
Across Sydney, 14,595 units were under construction as at year end and 24,525 had been approved.
Charter Keck Cramer director Sam Nathan told the Australian Financial Review the market drivers in Sydney, Melbourne and Brisbane were complex and different.
He nominated Sydney’s pent-up demand, Melbourne’s population growth and attractiveness to Australian and foreign investors and Brisbane’s affordability.
The continued lift in approvals over 2013 was very much focussed in the mutli?unit sector, particularly in the four or more storey block buildings.
House approvals have also been trending upwards but at a slower rate. House approvals are up 17.2% over the past year while apartments are up 27.6%.
CBA economist Diana Mousina says dwelling commencements totalled 165,000 in 2013 and will lift to 180,000 in 2014.
"Outcomes in line with our forecasts would represent a significant improvement on the 150,000 average of the previous seven years and would add significantly to GDP growth," Diana Mousina said.
