04 February 2010

Western Australia building approvals rise, driving Australian economy

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Building approvals in Western Australia rose 1.3 per cent in December, in line with the national upward trend, although still well below demand.

Australian Economy

Building approvals in Australia have increased, fueling jobs and consumption and stimulating the Australian economy.

Building approvals are a powerful stimulus for the Australian economy, boosting jobs and powering demand for goods and services.

Approvals in Western Australia rose to a seasonally adjusted 2,049 in December, up from the previous month's 2,022, The Australian Bureau of Statistics said.

Nationally, building approvals rose 2.2 per cent to 14,869 units from an upwardly revised 14,555 units in November.  In the year to December 2009, building approvals were up 53.3 per cent.

The market forecast expects building approvals to become weaker over the first half of 2010, due to expiry of the Government boost for new home builders and buyers.
 
Commsec economist Savanth Sebastian said December had benefitted from construction being brought forward to benefit from the boost, which ended 31 December. This in turn should create a bit of a lull in early 2010.

"While the result is certainly great at the moment with building approvals - they're holding at some of the best levels in about seven years in annual terms - it's likely that we [will] see a bit more weakness over the next few months," he said.

ICAP economist Adam Carr said the December building approvals numbers were "very strong," but that were still well below demand.

"Building houses is a powerful economic driving force. It creates jobs and promotes consumption both directly and indirectly," Mr Carr told AAP.

Australian immigration and an increasing population is often attributed to an increased demand for housing, which in turn stimulates the economy. 


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