Home building continues to rise in ACT

Low interest rates have rejuvenated the Canberra housing market driving increased home building activity from rising buyer demand.

The ABS reported that the number of homes approved for building over the first six months of this year has increased by 316 compared to the same period last year – a healthy rise of 16.1 percent.

A closer look at the data however reveals that an extraordinary rise in the approval of new units this year has generated the overall increase in dwelling approvals. 1710 apartments were approved over the first 6 months of this year – a stunning rise of 713 or 71.5 percent higher than the 997 units approved over the same period last year.

By contrast to the data for units, house approvals have fallen this year. 557 houses have been approved for building in the ACT over the first half of the year, down sharply by 397 or 41.6 percent below the 954 approved over the same period last year.

Increased building activity can be expected to generate increased local economic activity, although recent job market data remains subdued. The ABS reports that the trend unemployment rate for the ACT over July increased from 4.3 percent to 4.4 percent but is still just below the 4.5 percent recorded over July last year.

Jobs growth has also stalled in the ACT with the number of employed down by nearly 1500 over July compared to July last year.  The ABS also revealed a jump in the national unemployment rate over July to 6.3 percent – the equal highest rate since 2002 and indicating the economy may need more stimulus.

Dr Andrew Wilson is Domain Group Senior Economist Twitter@DocAndrewWilson The Property Show expert 2UE Saturdays 12.30-1pm