Australia’s housing sector is the one bright spot in the economy right now.
It’s the natural economic and sectoral leader in the transition away from the mining boom and has been specifically targeted and referenced by the Reserve Bank as a necessary part of Australia’s economic health going forward.
Dwelling commencements in first quarter of 2014 surged 8.7% to a record high annual rate of 196,000, the Australian Bureau of Statistics reports.
This is the second quarterly rise of 8.7% in a row and while UBS economist George Tharenou said that the relationship with building approvals suggests this might be a cycle peak, the record high level – since the 1950s – means that the housing recovery is “well on track”.
Tharenou also noted non-residential building bounced 9.6% after the big fall of 21.4% in the December quarter 2014. Importantly, even though things appear to have slowed, “in Q1, the pipeline of nominal work yet to be done still stayed near a record high at 1.9% of GDP”.
Good news monetary policy in Australia has not lost its touch and the extended period of “stability” the RBA continues to insist on will further support building even if the cycle peak is behind us.