Dwelling approvals tumble 33%

Seasonally adjusted dwelling approvals were at 9536 for December 2008, a 32.9% dip on December the previous year, and a 2.9% drop on November 2008, according to the ABS.The ABS reported 6813 (seasonally adjusted) private sector housing approvals for December 2008, a 2.3% slump on the previous month, and a 24% decline on December 2007.Approvals for other dwellings (apartments and townhouses) in the private sector in December 2008 totalled 2448, a 2.8% fall on the previous month, and a 49.4% tumble on December 2007.MBA chief economist Peter Jones said the ABS results indicated the economy has not yet felt the Reserve Bank of Australia’s aggressive rate cutting.“The disappointing fall in building approvals certainly appears to validate recent moves by the authorities to strongly engage all the macroeconomic policy levers,” Jones said.“It will take time before sharply lower interest rates and fiscal stimulus measures begin to offset the confidence-sapping effects of the global financial crisis and previously tight financial conditions.”He said the latest ABS figures supported MBA research showing that a pickup in enquiries had not translated into activity.“Nonetheless, the $21,000 boost scheme for first home buyers, further cuts to mortgage rates and housing initiatives contained in the nation building and jobs plan released on Tuesday should, over time, ensure that a badly needed housing recovery helps to cushion the Australian economy from a major downturn,” Jones said.He said Australia’s economy would begin to feel the effects of lower interest rates and government stimulus measures in the second half of this year.“Any further delay in the much needed upturn is not good news given the chronic level of under-building and shortage of stock that are fuelling sharp increases in rents,” Jones said.

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