Record low rates record high approvals

Record low rates, record high approvalsThe RBA’s decision yesterday has taken interest rates to historic lows, while the latest ABS data released on Monday shows building approvals at another record high.The Reserve Bank has cut interest rates by 25 basis points to 2.0 per cent takes lending rates to their lowest since the 19s.The rate cut, widely predicted by economists, is the second in three months. In February, the RBA dropped rates to 2.25 per cent to address a weak business investment outlook, falling commodity prices and high Australian dollar.RBA governor Glenn Stevens has said “the Board judged that the inflation outlook provided the opportunity for monetary policy to be eased further, so as to reinforce recent encouraging trends in household demandHe noted that “Dwelling prices continue to rise strongly in Sydney, though trends have been more varied in a number of other cities. The bank is working with other regulators to assess and contain risks that may arise from the housing market.”Meanwhile, building approvals have risen to a new high of 210,484 for the 12 months to March 2015, according to official data from the Australian Bureau of Statistics.The latest Building Approvals data showed the number of buildings approved climbed by 11.2 per cent, seasonally adjusted, buoyed by apartment sales. Approvals are up by 2.8 per cent for the month of March.The figures from the ABS underscore the vital importance of maintaining momentum in the property and construction industries, says the Property Council of Australia’s executive director residential, Nick Proud.”The only way we can make homes more affordable is to keep supply going strong and building activity levels high.”Building a record number of new homes is good for jobs, good for the economy and the best possible antidote to high house prices,” Proud concludes.