Building Approvals Up

Building approvals rose across Australia for a second consecutive month in March helped by lower interest rates and boosts to governments grants for first home buyers, economists say.

Australian building approvals rose 3.5 per cent to 10,494 units in March, seasonally adjusted, the Australian Bureau of Statistics said on Tuesday.

This followed a eight per cent rise in February.

In the year to March, building approvals fell 16.5 per cent.

The market forecast was for building approvals to have posted a rise of 2.8 per cent in March.

NAB Capital senior market economist, David de Garis, said a lift in the latest indicators of housing had resulted in an increase in building approvals.

"We have seen the demand for housing pick up in the finance figures and the home sales data," Mr de Garis said.

"That has flowed through into the first signs of activity, with builders making more plans for construction."

Approvals to build homes increased by 196 units to 7,333 units in March, while approvals to build flats, townhouses and villas rose by 78 units, the ABS said.

Despite reports of the federal government ending the boost to the first home owners grant on June 30, Mr de Garis said the policy has worked in lifting work in the building industry.

In mid-October, the government doubled the first home buyers grant to $14,000 for established houses and tripled it to $21,000 for newly built homes.

"The boost to the first home owners grant has done its job," Mr de Garis said.

"It will flow through to more activity in the second half of the year."

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