Building approvals in Western Australia rose over 12 per cent during December, bucking the national trend which declined for a sixth consecutive month.
Building approvals in Western Australia rose over 12 per cent during December, bucking the national trend which declined for a sixth consecutive month.
The state's building approvals rose from November's seasonally adjusted 1253 units to 1407 units in December, nearly reversing a downward trend that started in August when approvals reached 1855 units.
Figures are taken from the latest update from the Australian Bureau of Statistics.
In the year to December, total building approvals in WA fell 45 per cent from 2574 units, seasonally adjusted, recorded in January 2008.
Private house approvals rose 16.6 per cent to a seasonally adjusted 1193 units in December.
Nationally, building approvals fell 2.9 per cent to 9,536 units in December, seasonally adjusted.
This followed a 10.2 per cent fall in November, and marked the sixth monthly drop in a row.
Economists had forecast a 2 per cent rise for December.
The Housing Industry Association said the bulk of the year-end weakness came from New South Wales were building approvals fell 16.1 per cent over the December quarter.
In the year to December, national building approvals fell 32.9 per cent.
Nomura chief economist Stephen Roberts said the slump in building approvals justified the federal government's latest $42 billion stimulus, which will fund community housing programs.
"The home building approvals were expected to show a bounce but were very, very weak," Mr Roberts said.
"That shows extreme weakness in home building approvals ... that's going to be softer for a period to come.
"The government will take heart they'll be spending on public sector housing."
Nationally, private house approvals fell 2.3 per cent in December to be 24 per cent weaker annually.
This is despite the federal government's $10.4 billion October stimulus package, which tripled the first-home buyer grant for newly-built homes to $21,000.
The "other dwellings" category which includes apartments dropped 2.8 per cent in December for an annual decline of 49.4 per cent.
HSBC chief economist John Edwards said the construction industry had clearly not benefited from aggressive interest rate cuts since late last year.
"We think housing will turn around by mid year, given very low interest rates and considerable latent demand, but first we need to see a big turnaround in approvals for new construction," he said.
"There is no sign of it happening so far."
The Reserve Bank of Australia slashed interest rates this month to a 45-year low of 3.25 per cent.
This followed rate cuts in September, October, November and December which reversed a dozen rate rises between 2002 and early 2008.
Despite the improvement from a double-digit decline the previous month, CommSec economist Savanth Sebastian said the figures were a big concern.
He said measures such as the boost to the first home buyers grant and big interest rate cuts were expected to have positive impact on building approvals, but it would "take a bit more time" to show in the data.
"We still haven't seen the activity that was expected," Mr Sebastian said.
"Rate cuts tend to take about four to six months to flow through the economy so you could largely put this down to the high interest rates that we had mid last year.
"That's really what the approvals numbers are showing."
Although the figures showed a continued deterioration in building approvals, Mr Sebastian said anecdotal evidence pointed to a pickup in activity.
"While we haven't seen contracts being signed, the interest is certainly out there," Mr Sebastian said.
"We're starting to note that here at Commonwealth Bank."
Until the residential sector improved, Mr Sebastian said public sector works and government spending would be where "tradesmen and builders will have to continue to look at in the short-term".
