The Housing Industry Association (HIA) considers the 2.3 percent increase in building approvals in July a modest figure.

The Australian Bureau of Statistics (ABS) reported Tuesday of the first increase in building approvals in four months. The recent report shows approvals remained low in the first months of 2010.

According to HIA chief economist Harley Dale, the increase in July was a result of the 6.5 percent rise in other dwellings. The figures, Dale said, “largely reflected semi-detached dwellings and units of four or more storeys.”

The chief economist points at the low figures for the three months to July 2010. Total building approvals during the period were down by 11 percent, which Dale placed as a reflection of a 17 percent decrease in other dwellings and an 8 percent drop for detached houses.

The continuing downward trend for building approvals signals that the recovery of the housing industry “will fail to gather traction next year.” Dale said, “That lack of a sustainable recovery reflects higher interest rates, the unwinding of fiscal stimulus, and the considerable supply side obstacles to new housing which include a dire lack of available finance.”

Dale suggests for a new Federal government “to commit to housing policy priorities regarding a cost reduction program for new housing, the establishment of a housing and development ministry, and recognition and support for small business.”