“Building approvals were up by a sizeable 27.3 per cent in May 2012. This result provides some hope of an improved new home building outlook emerging in time and delivers preliminary evidence that recent interest rate cuts may be starting to have an impact,” said HIA Senior Economist, Andrew Harvey.

“However, we need to keep in mind that the result comes off a very low base in April and is driven by the highly volatile multi-unit part of the market. The level of approvals in the core segment of detached housing remains well below the levels recorded one year ago,” said Andrew Harvey.

“Key factors behind the strong May result include a partial rebound in Western Australia which saw approvals up by 24.8 per cent in May after a 47.2 per cent fall in April, along with a similar rebound in South Australia. There is also a “bring forward” effect in both Victoria and NSW where buyers have rushed into the housing market to secure state government home buyer incentives before they end on 30 June 2012,” said HIA Senior Economist, Andrew Harvey.

The HIA media release is much more informative than the OESR brief on building approvals, which misses the big story that there was a rebound in Queensland building approvals (seasonally adjusted), too (an increase of over 10%).

OESR only reports the trend series of building approvals, which is a smoothed out version of the seasonally adjusted series. Unfortunately, the ABS’s smoothing procedure smoothed out the significant rebound in building approvals in Queensland. OESR should include the seasonally adjusted figures in its next building approvals brief.