Dwelling commencements up 1.3% in Sept
17 December 2007
Housing constructions out on Monday suggest the residential sector is showing signs of recovery, economists say.
Australian dwelling commencements in the September quarter rose 1.3 per cent to 37,647 units, seasonally adjusted, from a upwardly revised 37,176 units in the June quarter, the Australian Bureau of Statistics said on Monday.
In the year to September, total dwelling commencements fell 0.8 per cent, seasonally adjusted.
Westpac senior economist Matthew Hassan said although the result was a bit softer than market expectations, he was optimistic about the year ahead.
"It's reasonably positive and looking forward there are some signs that (commencements will) head higher," Mr Hassan said.
He said housing approvals had been running ahead of commencements for the past few months, which will help ease the chronic housing shortage and alleviate the lack of rental properties.
But the industry was far from out of the woods, he said.
"There are signs that there's a bit of an upswing coming through and the question really is, will that be sustained through the latter part of the year with rate hikes likely to impact on the market," Mr Hassan said.
"There's a bit of a question mark there.
"Demand is being supported by income growth but is being dampened by high prices and rate hikes.
"The more important thing at this stage is the supply side of the equation. We've got quite clear shortages of housing in (eastern Australia)."