The ANZ said this fall in approvals may heighten some of the downside risk to dwelling investment in the fourth quarter. ANZ economist Alex Joiner said building approvals do have a strong historical relationship with cuts in interest rates and that the 300bps worth of cuts should see falls in building activity bottom out in coming months. He said the first home owners grant, which encourages the purchase of newly constructed homes, should help this cause. Further, Joiner said data released earlier in the week showed record inward overseas migration into Australia. “Net new arrivals in the year to June came in at well over 200,000 new residents, so there is no doubt the underlying demand for housing continues to be strong,” he said.
