Low interest rates and government stimulus measures for housing during the COVID-19 pandemic have seen building approvals for houses soar to their highest level in 21 years.
Domestic demand more broadly also appears to be growing from the depths of recession with new figures showing imports jumping 10 per cent late last year.
Australian Bureau of Statistics figures show total dwelling approvals rose 2.6 per cent in November to 17,205, led by private sector houses increasing for a fifth consecutive month, up by a further 6.1 per cent to 11,489.
Private house approvals stand 33.6 per cent higher than a year earlier.
ABS director of construction statistics Daniel Rossi said approvals for private houses had now surged 40 per cent since June.
“Federal and state housing stimulus measures and low interest rates have resulted in strong demand for detached dwellings,” Mr Rossi said on Thursday.
Housing Industry Association economist Angela Lillicrap said the extension of the federal government’s HomeBuilder stimulus program at the end of November will see the strength in detached house approvals extend into 2021.
“HIA new home sales data suggests that detached house building approvals will continue to be strong over the coming months,” she said.
However, approvals for other dwellings excluding houses fell 3.9 per cent in November to be 13 per cent down on the year.
The ABS also reported the monthly trade surplus for goods and services was $5 billion in November, $1.6 billion smaller than in October.
This was the result of a 10 per cent rise in imports in the month, compared with a three per cent increase in exports.
JP Morgan economist Tom Kennedy said the magnitude of the imports rise would usually be the result of the importation of a very large item like an aircraft, but on this occasion all import groups reported strong gains, suggesting a genuine pick-up in demand.
“Consumption imports were also strong (up four per cent) which is consistent with the rebound in household spending from mid-year,” he said.
He also felt the three per cent rise in exports was a solid outcome given ongoing trade frictions with China, and were not as bad the preliminary figures for the month released late last year.
However, coal exports did fall a further four per cent and are now 44 per cent below the 2019 average, he said.
Coal has been one commodity impacted in the souring trade relations between Australia and China.