Despite a rise in approval figures for August, the Housing Industry Association (HIA) has said the prospect of a recovery in the sector is still only a vague possibility.

 

Recent figures show a 6.4 per cent increase in seasonally adjusted building approvals, but the HIA’s Chief Economist, Harley Dale, remains unconvinced.

 

“The remaining four months of updates for building approvals for 2012 will be crucial, because right now there is no compelling evidence pointing to us being on the cusp of a new housing recovery,” Dr Dale said.

 

“However, the narrow base – a 22.5 per cent rise in approvals for ‘other dwellings’ which only partially recovers the 46.5 per cent loss of the previous month - is obviously less than ideal.”

 

Dr Dale pointed to the 1.7 per cent contraction in detached housing construction, which has continued its freefall over the last year to end 4.5 per cent lower than this time last year.

 

He also warned that without a prompt revival in the sector, the industry might face a third consecutive yearly decline in dwelling commencements.

 

In August 2012 total seasonally adjusted building approvals increased by 30.3 per cent in Victoria, 16.1 per cent in Western Australia, and 1.8 per cent in Queensland. Building approvals fell by 18.3 per cent in New South Wales and were down by 1.1 per cent in South Australia and 1.2 per cent in Tasmania. In trend terms building approvals in August increased by 1.4 per cent in the Northern Territory but fell by 10.8 per cent in the Australian Capital Territory.