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Stimulus measures are working to spark an increase in new house construction but more will be needed to ensure a sustained recovery.
Dwelling approvals rose for the second consecutive month in March to 10,494, the ABS revealed yesterday. This represented a 3.5 per cent improvement from February.
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Compared to March 2008 however, approvals remain 16.5 per cent lower.
With housing commencements also expected to be down around 17 per cent in the March quarter, compared to last year, building and construction industry body Master Builders believes it would be unwise for the government to end the boost to the First Home Owners Grant.
“Although the pickup in approvals does give cause for optimism for the future, actual residential building activity in the here and now is suffering,” Master Builders chief economist Peter Jones said yesterday.
“This highlights the importance of the first home owners boost scheme, particularly for new homes, and the need to maintain it beyond 30 June, thereby ensuring that momentum is sustained in a sector so vital to Australia’s short term economic prospects.”
