The Rudd government's "Education Revolution" is paying extraordinary dividends for Victoria's building industry, with an unprecedented $653 million of education building contracts let in June, more than four times the previous revcord in records dating back a decade.
Education building work also soared in Queensland and South Australia, but not in NSW, suggesting that other states were quicker to let contracts.
Victorian home building approvals jumped 20 per cent in June to their highest point in 6 years, as first home buyers rushed to take advantage of the full $21,000 First Home Buyers Boost for for new homes which phases out after September...
Australia-wide, approvals surged 10 per cent.
"It's encouraging, but a sustained recovery in home building needs to be more widely-driven than in the first home buyer market if we are to make serious in-roads into the shortfall of stock," said Housing Industry Association economist Harley Dale.
CommSec economist Craig James agreed, saying building would need to increase still further to avoid a house price bubble of the kind that concerns the Reserve Bank governor.
Speaking on Tuesday Governor Glenn Stevens said a "very real challenge" would be "how to ensure that the ready availability and low cost of housing finance is translated into more dwellings, not just higher prices".
Mr James said with demand for homes propelled by the fastest population growth in 40 years and interest rates at generational lows, there was a risk of a housing bubble if home building didn’t lift sharply over the coming year.
It’s a simple matter of demand and supply. Demand is increasing and supply isn’t keeping pace, leading to higher prices and tight rental markets," he said.
Building approvals for apartments jumped sharply in June, but not by enough to offset a larger slide in May.
Published in today's SMH