HomeBuilder Fuels Record Of Approvals | Islander
Approvals for building private homes hit an all-time high in February, fueled by the federal government’s HomeBuilder grant program set to end on Wednesday.
The Australian Bureau of Statistics has said that since HomeBuilder’s introduction in June 2020, private home approvals have increased by almost 70%.
In February, home approvals jumped 15.1% to 13,939 homes, surpassing the previous high set in December of last year.
“HomeBuilder has created a strong demand for new housing across the country,” Housing Industry Association chief economist Tim Reardon said.
“The record volume of work will see housing construction absorb workers from across the economy in 2021 and into 2022.”
The HomeBuilder program was introduced deep in the COVID-19 pandemic and at the end of last year it was extended until March, although the grant amount was reduced from $ 25,000 to 15,000 $.
Although it is now complete, applications can still be submitted until April 14 and work must begin within six months of signing a new contract.
Such strength in residential construction comes on top of the current dynamism of the market, which has seen the biggest increase in house prices since 2009 and demand for mortgages at an all time high with interest rates at historically low levels. .
Financial regulators are closely monitoring developments in the real estate market, although they say there is no cause for alarm at this point.
The Reserve Bank’s monthly credit data, also released on Wednesday, showed a steady increase in homeowner loans.
In February, homeowner loans increased 0.6% to an annual increase of 5.9%, the highest level since January 2019.
However, investor loans only increased 0.1 percent to a meager 0.2 percent on the year.
“It probably also makes APRA and RBA more comfortable with current macroprudential policy settings, as owner-occupied loans tend to be less risky than investor loans,” said Diana Mousina, economist. senior at AMP Capital.
While the housing sector is booming, the airport industry has been wiped out by the pandemic.
The Australian Competition and Consumer Commission analysis found that revenues at the country’s four largest airports fell from 15.5% to 21.6%, with passenger numbers falling by 26.5%.
Commission chairman Rod Sims said the pandemic has devastated the aviation industry and airports, but warns the watchdog will keep a close watch on the industry in its recovery phase.
“Given the existing market power of airports, it will be essential that legitimate attempts to return to a sustainable financial position do not stray into anti-competitive behavior or result in unreasonable price increases.”
A separate analysis of the impact of the pandemic predicts that at least 5,000 businesses are expected to close their doors in the next three months.
This follows the end of the JobKeeper wage subsidy and returning to normal insolvency trade rules, measures that have kept thousands of businesses alive that would otherwise have folded.
Patrick Coghlan, managing director of credit reporting agency CreditorWatch, doesn’t expect the insolvency tsunami we talked about last year, but argues that companies should be allowed to go bankrupt.
“This means that businesses that shouldn’t be running don’t shrink the rest of the economy,” Coghlan said.
“We need to at least get back to pre-COVID administration levels and move away from the synthetic environment we’ve been living in for the past 12 months.”
Australian Associated Press