Record set for new home approvals

In a favourable omen for trucking, latest data from the Australian Bureau of Statistics reveals new home approvals are at an all-time high

New home approvals are soaring in Australia, with approvals for a total of 18,245 new homes (in seasonally adjusted terms) in November 2014 eclipsing the previous record, set in August 1994, by three per cent.

The data is welcoming news for the road transport industry which, like many other industries, stands to benefit from a rising rate of residential construction.

The latest figures, released by the ABS on January 8, show that total private sector approvals in November rose by 7.5 per cent compared with the previous month, and by 10.1 per cent compared with November of the previous year.

The welcome performance is in stark contrast to an earlier Bloomberg prediction, which forecast that approvals for the month would in fact fall by three per cent.

The rise comes off the back of further significant growth in October, giving government and industry alike cause for some optimism against the gloomy backdrop of the mining slowdown.

A rising rate of new home approvals is generally regarded as an indicator of future economic growth, for the residential construction industry specifically and for its many related industries, including producers of materials and transport companies.

The majority of the growth has come from the apartment sector, where a rise of 18.0 per cent was recorded for November (year on year). In comparison, approvals for new detached housing grew by 3.6 per cent in the same period.

Victoria led the charge in November, where seasonally adjusted new dwelling approvals rose by 19.7 per cent, followed by Tasmania (up 8.2 per cent), Queensland (up 5.7 per cent) and Western Australia (up 1.2 per cent).

In contrast, New South Wales and South Australia both experienced drops of 1.4 per cent and 16.3 per cent respectively, while in trend terms the ACT saw growth of 3.3 per cent, as did the Northern Territory (up 2.9 per cent).

According to the Housing Industry Association's Senior Economist, Shane Garrett, the latest results will provide the Australian economy with a welcome boost.

"Residential construction was the economy's good news story during 2014 and today's figures indicate that we can look forward to another positive year for the industry," he said.

"The fact that approvals hit an all-time high during November augers very well for the pipeline of residential construction work in 2015.

"With weaknesses in several areas of the Australian economy, new home building has come to life at an opportune time. Construction is now a central pillar of support for domestic demand in Australia."

Record set for new home approvals

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