Australian housing sector ‘making a comeback’
The housing sector is set to make a comeback, getting a further boost from yesterday’s interest rate cut, economists say.
Australian residential building approvals fell 13.6 per cent to in September, seasonally adjusted, the Australian Bureau of Statistics (ABS) said on Wednesday.
Economists’ forecasts had centred on a five per cent fall in approvals in September.
Approvals for private sector houses in September rose 1.1 per cent and the volatile “dwelling excluding houses” category fell 20.7 per cent.
Nomura chief economist Stephen Roberts said he expected the housing sector to improve in the coming months, especially after yesterday’s interest rate cut.
The Reserve Bank of Australia cut the cash rate from 4.75 per cent to 4.5 per cent and it was followed by by all four major banks cutting their standard variable interest rate.
“Already, we’ve seen housing finance commitments picking up over the last few months,” Mr Roberts said.
“This pattern with interest rates is only going to accelerate it as we go ahead.
“We’ve seem to have gone through the base as far as housing credit is concerned and that will pick up in the next few months, so some of that will come back to home building approvals.”
Mr Roberts said the rise in building approvals was particularly strong in the larger states.
“The interesting part is that is that the house part of it improved a bit and was relatively strong in both NSW and Victoria,” he said.
“The multi occupancy part is really up and down, particularly the public sector part of it.”