Building data shows underlying market confidence -...

Building data shows underlying market confidence - economist
13:24, Monday, 4 September 2006

Sydney - Monday - September 4: (RWE Aust Business News) - The
latest building approvals data suggests, at the very least, the
development sector is not sitting on the sidelines, an economist said
today.
Building approvals, seasonally adjusted, rose by 8.3 per cent in
July to be up 9.1pc over the year.
The usually volatile "other" dwelling sector jumped 13.6pc
following a 19pc rise the previous month.
ANZ Bank senior economist Ange Montalti said this implies an
underlying confidence in the market in some states.
"This is consistent with our view that the housing market is
fundamentally in a very strong position, with vacancy rates continuing to
fall and house prices holding firm (at the very least) in most capitals,"
he said.
"We expect some softening in approvals over the second half of
2006 as interest rates begin to impact.
"However, underlying housing fundamentals and a fairly robust
household sector suggest activity will hold up relatively well from here.
"Approvals are now trending at a completions rate of nearly
150,000, still short of the 160,000+ dwellings needed to accommodate a
growing population.
"Reflecting the inadequacy of supply, we therefore expect
rentals, prices and new building activity to improve through 2007/08."