Nation’s Housing Approval Decline Steepens

The decline in housing approvals has accelerated, plummeting to the lowest level in more than a decade.

The number of homes approved nationally in April was 8 per cent down on the previous month, according to the latest data from the ABS, the lowest level since April, 2012.

This fall follows a 1 per cent decline in March and comes after the National Housing Finance and Investment Corporation estimated a national shortfall of more than 100,000 homes to 2027.

ABS head of construction statistics Daniel Rossi said the overall decline was driven by a fall in approvals for private sector homes excluding houses, which fell 16.5 per cent, to the lowest level since January, 2012.

“Private sector house approvals also continued to decline, falling 3.8 per cent in April, following a 3.7 per cent decrease in March.”

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▲ Source: ABS

Across Australia, total home approvals were mixed, with falls in Queensland (-22.8 per cent), Victoria (-18.6 per cent), and Western Australia (-5.8 per cent).

Meanwhile, rises were recorded in South Australia (19.8 per cent), New South Wales (12.5 per cent), and Tasmania (3.5 per cent).

Approvals for private sector houses fell in Victoria (-9.3 per cent), Queensland (-6.0 per cent), and New South Wales (-1.7 per cent) while South Australia (+10.8 per cent) and Western Australia (+0.1 per cent) rose in April.

The value of total building approvals rose 4.7 per cent, following a 5.7 per cent fall in March. The value of total residential building approvals fell 2.5 per cent with a 2.7 per cent decrease in new residential building and a 1.2 per cent fall in alterations and additions.

The value of non-residential building approvals increased 13.5 per cent after a 5.1 per cent fall in March.

Master Builders Australia acting chief executive Shaun Schmitke saids the reverses in new home building approvals come in the aftermath of 12 months of rising interest rates and inflation at its highest in more than 30 years.

“The data reflects the cautious approach being taken by developers and consumers in the face of economic uncertainty and high building costs,” he said.

“Although demand for medium and high-density housing is surging, the pipeline of new stock is rapidly diminishing.

“The fall in new builds will exacerbate pressures in the rental market at the worst possible time with data showing the proportion of income needed to pay rent lifting to the highest level since June 2014.”

Article source: Queensland Property Investor