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Economist forecasts ‘building boom’ in 2015

The pessimists might have to quieten down for the time being after building approvals reached record levels in 2014.

The Australian Bureau of Statistics has revealed that there were 200,814 approvals last year – the first time Australia passed the 200,000 mark.

That included 17,753 approvals in December 2014, which marked an 8.8 per cent increase on December 2013.

Approvals for private sector houses climbed 4.8 per cent, while approvals for other dwellings jumped 9.9 per cent.

Master Builders Australia chief economist Peter Jones said last year’s record results point to a “looming residential building boom in 2015” and “challenge preconceptions that the approvals growth cycle has peaked”.

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“The historic high is being driven by the boom in apartment building in Sydney and Melbourne that shows no immediate sign of abating,” Mr Jones said.

“The boom in approvals will eventually flow through to increased housing supply and work to help ease affordability pressures.”

Housing Industry Association economist Geordan Murray said while apartments boomed in 2014, detached house approval numbers were consistent on a month-by-month basis.

“Looking at the performance of Australia’s major industries in 2014, residential building was amongst the top performers,” Mr Murray said.

“The low and stable interest rate environment has provided support for demand from home buyers during the year and this situation looks to remain the case throughout 2015.”

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