Dwelling approvals continue falling: ABS

Dwelling approvals continue falling: ABS
Dwelling approvals continue falling: ABS

The HIA’s chief economist, Tim Reardon says an easing of the credit squeeze is necessary to alleviate the adverse impact of the housing downturn on the wider economy.

The number of dwellings approved in Australia fell by 0.6 per cent in April, according to data released by the Australian Bureau of Statistics (ABS).

According to the recent ABS release, among the states and territories, total dwelling approvals fell in Victoria (2.8 per cent), Tasmania (2.2 per cent), the Northern Territory (2.0 per cent) and New South Wales (0.4 per cent), in trend terms.

Small increases were recorded South Australia (1.8 per cent) and Western Australia (1.3 per cent), while Queensland was flat.

The Australian Capital Territory stood out however with a large increase of (7.7 per cent),.

"The overall decrease was led by private sector houses, which declined 1.9 per cent in trend terms," said Justin Lokhorst, Director of Construction Statistics at the ABS. "Meanwhile, private dwellings excluding houses rose by 1.2 per cent."

Approvals for private sector houses fell 1.9 per cent in trend terms.

Declines were recorded in New South Wales (3.8 per cent), Victoria (2.7 per cent), Queensland (0.8 per cent) and South Australia (0.1 per cent), while Western Australia recorded a 0.5 per cent increase.

Examining the data in seasonally adjusted terms, at the national level, the number of dwelling approvals fell by a seasonally adjusted 4.7% to 14,123, with the overall fall in approvals broad-based.

The total dwellings decline of 4.7 per cent in April was driven by falls in Tasmania (19.1 per cent), Victoria (16.1 per cent), Western Australia (6.7 per cent) and South Australia (3.3 per cent).

Private dwellings excluding houses fell 6.5 per cent, while private house approvals decreased 2.6 per cent.

The value of total building approved fell 0.2 per cent in April, in trend terms. The value of residential building declined 0.9 per cent, while non-residential building rose 1.0 per cent.

Tim Reardon noted home building had been cooling since late 2017 and the downturn in activity has accelerated in the second half of 2018.

"Approvals for new homes in the three months to April 2019 were 20.5 per cent lower than in the same period the year before,” added Mr Reardon.

“The downturn in building activity is now evident in other economic data including today’s data on capital expenditure.

"CAPEX fell 1.6 per cent in the March 2019 quarter due to significant falls in expenditure on new buildings.

“With the slowdown in home building accelerating in the first half of 2019, it is likely to weigh on economic growth in next week’s national accounts data.

“The fall in approvals in April were most likely influenced by low levels of consumer confidence during the Federal Election however, the end of the election alone will not be sufficient to bring stability back into the housing market."

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Abs Dwelling Approvals

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