New home building approvals, lower mortgage rates and a growing population are expected lead to a further recovery this year.
Australian Bureau of Statistics data has shown that building approvals increased by 2.9 per cent in November, this is up 13.2 per cent on the November figures for 2011.
All gains came in the multi-unit sector, which climbed 10 per cent in November and over 36 per cent for the year.
Home building and renovation is worth around $68Billion a year in Australia and the RBA is counting on a recovery in the housing market to boost the economy if the current boom in mining investment starts to peak later this year.
Australia’s population is expanding at the fastest pace in almost three years and after a series of rate cuts last year, mortgage rates are now well below long-term averages.
The population grew by 1.6 per cent in the year to June 2011, up from 1.14 per cent the previous year.
The Housing Industry Association also reports sales of new homes rose 4.7 per cent in November, for a second straight month of gains.