Building approvals show “exceptional” growth
Building approvals enjoyed "exceptional" growth in January, Master Builders Australia (MBA) has stated.
Official Australian Bureau of Statistics (ABS) data revealed residential approvals jumped 6.8 per cent during the month in seasonally adjusted terms, reaching 17,514.
MBA said this is only the sixth time since records began that the number of dwellings given the green light has surpassed 17,000. It was also the highest monthly figure since August 2002.
The news may encourage more construction firms to reassess their tradies insurance requirements in anticipation of securing bigger, better projects on the horizon.
Peter Jones, chief economist at the MBA, said the ABS results are welcome, with January 2014 approvals up more than 30 per cent on the same month last year.
"Particularly encouraging was the 8.3 per cent increase in housing approvals, confirming a broadening of the recovery to a more sustainable footing," he explained.
"Positive results were recorded in January in all states although there were declines in the territories in seasonally adjusted terms."
MBA members claimed opportunities for builders are on the rise due to strengthening market conditions, although they highlighted supply-side issues.
Mr Jones urged the Reserve Bank of Australia (RBA) to not take the results as a sign to move quickly in raising interest rates, which are currently at record lows.
The RBA decided against changing the current base interest rate of 2.5 per cent yesterday (March 4). The central bank lowered the rate twice in 2013 and made four reductions the previous year.
However, the MBA said there is still more to be done before a full housebuilding recovery can be realised.
"Master Builders is calling on federal and state and territory governments to tackle supply-side bottlenecks and impediments to ensure the recovery is not undermined by a spike in the price of new housing," Mr Jones stated.