Building approvals soar in May

The number of building approvals surged by more than 27 per cent on-month in May, according to the Australian Bureau of Statistics (ABS).

The number of dwellings approved rose 27.3 per cent on-month in seasonally adjusted terms, following a fall of 7.6 per cent in the previous month.

The huge increase was spearheaded by Victoria which rose by 31.8 per cent compared to April, followed by NSW with an 25.1 per cent increase and Western Australia at 24.8 per cent.

Tasmania was the only state to see a reduction in building approvals, falling 12.1 per cent.

The value of total building approved rose 43.4 per cent in May, in seasonally adjusted terms, after falling for three consecutive months. The value of residential building rose 26.8 per cent while non-residential building rose 71.0 per cent.

The Housing Institute of Australia (HIA) has welcomed the results, calling it a rare piece of positive news.

“This result provides some hope of an improved new home building outlook emerging in time and delivers preliminary evidence that recent interest rate cuts may be starting to have an impact,” said HIA senior economist, Dr Andrew Harvey.

“However, we need to keep in mind that the result comes off a very low base in April and is driven by the highly volatile multi-unit part of the market. The level of approvals in the core segment of detached housing remains well below the levels recorded one year ago.”

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