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Building increases but confidence declines

by Staff Reporter10 minute read

Building and consumer sentiment surveys from before and after the federal Budget have painted conflicting views about market confidence.

The Australian Bureau of Statistics has reported that $13.1 billion worth of residential construction was done in the first three months of 2014.

That marked an 8.4 per cent annual rise and a 6.8 per cent quarterly rise.

Non-residential construction reached $8.7 billion, which was 3.1 per cent up on the previous year but 1.5 per cent down on the previous quarter.


The Housing Industry Association also reported that new home sales rose in April, which was the fourth consecutive monthly increase.

Private sector new home sales enjoyed 2.9 per cent month-on-month growth, while multi-unit sales increased by 9.3 per cent.

Detached house sales also rose 1.8 per cent across Australia, driven by 6.4 per cent growth in Western Australia, 5.2 per cent growth in NSW and 0.5 per cent growth in Victoria.

However, there were declines in Queensland, by 2.1 per cent, and in South Australia, by 6 per cent.

The association forecast that momentum in new home building would carry over into the June quarter.

However, Roy Morgan Research has reported that consumer confidence has now dipped into the pessimistic zone for the first time since May 2009 due to concerns over the federal Budget.

SQM Research managing director Louis Christopher forecast that the official cash rate was likely to remain at a record-low 2.5 per cent as a result.

“The Budget has delayed any rate rises for at least the next 12 months, if not longer,” he said.

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