New home building approvals in Australia rose slightly in November thanks to a continued shift to apartment living, but many expect lower mortgage rates and a growing population to signal further recovery this year.
Australian Bureau of Statistics data showed building approvals increased by 2.9% in November, up 13.2% on the same month in 2011.
All gains came in the multi-unit sector, which climbed 10% in November and over 36% for the year.
The RBA is counting on a recovery in the housing market to boost the economy if the current boom in mining investment starts to crest later this year.
Home building and renovation is worth around $68bn a year in Australia, according to news.com.au – a little less than 5% of annual economic output – but it can swing sharply from year to year, making an outsized impact on growth.
After a series of rate cuts last year, mortgage rates are now well below long-term averages. Combined with flat home prices and rising incomes, that has made property more affordable.
Australia's population is also expanding at the fastest pace in almost three years. The population grew by 1.6% in the year to June 2011, up from 1.14% the previous year.
The Housing Industry Association also reports sales of new homes rose 4.7% in November, for a second straight month of gains.