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Wednesday 2 December 2020

House approvals at 20-year highs (Perth & Melbourne)

House building boom

House approvals have doubled since June in Perth as a heady mix of 6-year highs for iron ore prices and the (now-extended) HomeBuilder stimulus combine forces to drive housing higher. 

House approvals have also rebounded in Melbourne as the lockdown drew to a close. 

Units and attached approvals are still 11 per cent lower than a year earlier, but the word on the street is that the new cycle is now getting underway in Sydney and Brisbane (bear in mind the long lead time for projects, with borders to reopen in 2021). 

Detached house approvals are actually at 20-year highs overall, with the stimulus a resounding success.

When borders do reopen few Aussies will want to leave, and there will be rampant demand for study and residency Down Under. 

Thousands of rental units remain vacant, so there will be plenty of space for the new arrivals when they do come. 

The Reserve Bank noted how the economic recovery has been better than expected, but will keep interest rates glued to zero for at least the next three years, and is prepared to do more if necessary.