Commercial building approval rates hit record highs in August 2019 as new home approval continued trending towards a seven-year low.
The value of approved commercial building jobs for August 2019 was $6.14 billion, the strongest monthly performance ever recorded. Compared to the same period last year, this is an 89.2 percent boost, accredited predominantly to big gains in the health and office sectors.
"The lion’s share of the growth in commercial building related to publicly funded social infrastructure projects such as hospitals, demonstrating the positive role that can be played by government investment at a time of below par economic growth," says Shane Garrett, Master Builders chief economist.
Low financing costs, robust employment gains and a booming population has seen commercial building continue to rise in 2019, a trend forecast to extend into 2020.
The same cannot be said for new home approval rates, with detached house approvals dropping 2.6 percent and ever-closer to a seven-year low.
"As it usually takes at least six months from approval stage to the start of actual building work, today’s figures mean that new home building activity will continue to move lower for the rest of this year and well into 2020," says Garrett.
"We are now in a situation where we are building fewer new homes than we need in order to satisfy long-term demand. This risks holding back Australia’s future economic development and making the goal of home ownership even more difficult over the coming years."
Image: Danist07, Unsplash.