Building approvals hit 30-year high

There were 197,571 approvals for the 12 months to 30 August 2014, according to new data from the Australian Bureau of Statistics.

This is the highest 12-month figure since records began in 1984, beating the previous record of 195,227 set in July.

The total number of new homes approved in August was 16,810, which marked a 14.5 per cent increase on the year before.

Private sector housing approvals rose 12.2 per cent to 9,231, while private sector approvals excluding houses jumped 17.5 per cent to 7,348.

Housing Industry Association economist Geordan Murray said the latest statistics show that low interest rates are helping to lead a sustained recovery in new homebuilding.

Master Builders Australia chief economist Peter Jones said the growth in building supply is a positive because it should help to restrain house prices.

“As the Reserve Bank of Australia says, supply factors are critically important – the supply response determines whether additional demand feeds into higher prices or not,” he said.

“Alarmist calls by some commentators for measures to curtail so-called speculative investment in housing need to be treated with caution to ensure they do not stymie the residential building upswing.”