New building approvals figures have recorded the biggest monthly growth in decades, with rates boosted by increasing numbers of apartment developments across the nation.
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The number of homes approved across the country increased by 27.3 per cent over May, seasonally adjusted, according to figures issued by the Australian Bureau of Statistics yesterday.
The data came as the Reserve Bank decided to hold the cash rate at 3.5 per cent after cuts in the two previous months and the increase in approvals was more than five times the figure expected by economists.
Seasonally adjusted data was not available for the ACT, but local Housing Industry Association executive director Neil Evans said the capital had experienced an increase in approvals over May.
Mr Evans said some of the boost could be attributed to an increasing number of apartment developments, which were rebounding after a fall of more than 80 per cent over the March quarter.
''It looks like there's still room for apartment buildings in the ACT, as far as developers are concerned,'' he said.
However, Mr Evans said the capital could expect to see moderate declines in approvals over the coming months.
''We'll see a little bit of a softening before we come out of it,'' he said.
Mr Evans also dismissed reports of oversupply in the capital, referring instead to information provided to the HIA by the National Housing Supply Council.
''The figures we've got indicate that the ACT has been tracking pretty close to supply meeting demand,'' he said.
Nationally approvals for private sector houses rose 8.7 per cent in May, seasonally adjusted, after a fall of 11.4 per cent in the previous month. Approvals for private sector homes excluding houses - such as apartment developments - experienced an even greater boost of 58.7 per cent.
HIA senior economist Andrew Harvey said the national figures provided some hope for an improved new home building outlook.
''However, we need to keep in mind that the result comes off a very low base in April and is driven by the highly volatile multi-unit part of the market,'' he said.
Mr Harvey said previous leading indicators on housing activity had been ''appalling''.
Meanwhile, the building and construction industry said the RBA's decision to hold the official cash rate put pressure on the sector.
The central bank had previously cut the cash rate by half a percentage point in May, and a quarter of a percentage point in June, citing instability in Europe and a mixed outlook for domestic growth.
Speaking after yesterday's announcement that the cash rate would be held, Master Builders Australia chief executive Wilhelm Harnisch said previous rate cuts were only now starting to be felt.
''With many builders in survival mode, further interest rate cuts would help boost home buyers' confidence, stimulate investment and alleviate cost pressures on industry,'' he said.
CMC chief market strategist Michael McCarthy said that previous cutting action by the RBA - plus improved data - had kept the central bank's hand steady.
''The jobs and growth data from the first quarter [of 2012] were pointing to a wait-and-see attitude, particularly since they'd cut twice in the last two months,'' Mr McCarthy said.
with AAP
