Australian housing construction approvals have dipped in the past couple of months, but are still at 19-year highs. Home building approvals were down 3.5 per cent in March, following a 5.4 per cent fall in February, according to official figures released yesterday.
However, there were more than 188,000 home building approvals in the 12 months to March, the highest since 1995 and 20 per cent higher than the year before.
Commonwealth Bank senior economist Michael Workman said the housing construction sector looks ready to be the main driver of the Australian economy when mining investment winds down.
"There is still a significant boost coming to construction and spending which will help offset the winding down of resources investment from its recent peak," he said. "Non-residential construction approvals are also trending higher, thanks to strong interest in new CBD commercial developments."
Workman said the strength in housing will help employment growth and flow into other sectors of the economy.
"We expect to see sharp rises in the construction activity data in coming quarters," he said. "It should also flow into higher spending at big box retailers as the new dwellings are kitted out."
JP Morgan economist Tom Kennedy said the weakness in the home building approvals is almost entirely attributable to a larger than expected decline in the volatile high-density approvals.
Approvals for private sector houses fell 0.7 per cent in the month, and the "other dwellings" category, which includes apartment blocks and townhouses, was down 7 per cent, the seasonally adjusted figures from the Australian Bureau of Statistics showed.
Housing Industry Association chief economist Harley Dale said home building would be a major boost for the economy in 2014.