Residential Building and Home Loan Approvals Rise

More people are taking advantage of low interest rates and a strong property market, as new data has shown a rise in building approvals over the month of March.

Australian Bureau of Statistics (ABS) figures analysed by the Housing Industry Association (HIA) found the level of home construction during the early months of 2014 is still particularly strong, presenting good opportunities for residential real estate owners and buyers.

Over March, total seasonally adjusted building approvals in Australia experienced a small dip of 3.5 per cent, but is a positive result for the month overall. At the same time, detached housing approvals were relatively unchanged over the month, but experienced a 7.7 per cent increase over the March quarter.

HIA Chief Economist Dr Harley Dale said that building approvals may have already reached their peak, however they're still expected to be "consistent with with healthy growth".

"New home building has a large reach into the wider domestic economy and the sector is very much Australia's economic barometer in 2014," Dr Dale said in a May 5 statement.

A change in taste

In December last year, approvals for multi-unit dwellings reached a record high, showing a consumer preference for this type of housing. This was evident in the market for real estate in Sydney, which saw multi-unit approvals soar to account for 76 per cent of all approvals in December.

At the same time, apartments and units also accounted for 71.1 per cent of all building completions in the last quarter of 2013.

However, since this period, it seems as though consumer preference has changed again. Looking at ABS data, detached homes approvals are rising nationally and may signal that more people are taking advantage of state-provided incentives such as first home buyer and new home building grants.

Approvals strong in 2014

For anyone in the market for a new home, it's likely you'll be in good company. ABS data analysed by Loan Market found that home loan approvals were already off to a strong start in 2014 after 52,460 loans were taken out in February this year.

Loan Market Director Mark De Martino said he expects home loan data for both March and April to be strong, if the performance from February and January continues.

"In the shortest month of the year there were only 227 fewer home loan approvals than the best month in 2013. Considering this, we should expect to see demand for finance growing and reaching new highs throughout 2014," Mr De Martino said.