Surprise rise in home approvals

APPROVALS for the construction of new homes rose by 0.9 per cent nationally in October, boosted by a jump in activity in Victoria, official figures reveal.

The increase was far better than market expectations for a 1 per cent decline.

Approvals for the development of private houses were up 1.5 per cent in the month, and have now risen for five of the past six months. Permits in the “other dwellings” category — which includes apartment blocks and townhouses — continued to show volatility, falling 1 per cent nationally in October from a revised 0.1 per cent decline the previous month.

Total approvals jumped 24.3 per cent in Victoria to 6650, seasonally adjusted, but they were down in New South Wales, Western Australia and South Australia.

Total building approvals are now up 18.4 per cent over the year to October, the Australian Bureau of Statistics said yesterday.

Housing construction activity has continued to be supported by record low interest rates and strong population growth, but rising household debt has been a major concern for regulators.

The Australian Prudential Regulation Authority tightened investor lending rules in March, forcing major lenders to increase rates and make investment home loans more expensive.

The Australian dollar was volatile yesterday after the release of the housing approval figures and the release of September quarter private capital expenditure figures.

It dipped slightly to US75.63c after the release of data but then recovered and was buying more than US75.8c late yesterday.