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Staff Reporter
Building approvals have slumped to their lowest level since the GFC, building the case for another rate cut next week.
"Approvals for both detached houses and other dwellings dropped sharply in October 2011, taking total approvals to a level 30 per cent below that of the same month last year," HIA chief economist, Harley Dale said.
"This outcome vindicates the November interest rate cut, justifies the case for a further cut next week, and highlights the folly of blindly focussing on a budget surplus objective for 2012/13."
In the month of October 2011 total seasonally adjusted building approvals fell by 10.7 per cent following a downwardly revised 14.2 per cent drop in September.
Detached house approvals fell by 7.6 per cent in October to their lowest level since January 2009, while approvals for other dwellings slumped by 16.7 per cent to their lowest level since October 2009.
"Today's approvals update is a very weak one which serves to highlight the urgency of acting in late 2011 on both the monetary and fiscal policy front," Mr Dale said.
"Such action would both shore up confidence and reduce the risk of housing activity plumbing the depths last seen during the GFC.
"Building approvals over the three months to October 2011 are implying a level of housing starts around 138,000 at best, lower than the level reached in calendar year 2009 and only 6,500 higher than the trough hit in financial year 2008/09."
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