NSW new home approvals near record low

Only 1394 new private homes in NSW were approved for construction in May this year according, to latest Australian Bureau of Statistics figures.

That represents a seasonally adjusted 27% decline in NSW approvals since March this year and follows a 13.5% fall in April.

The May figure is the second worst May approval figure in ABS record-keeping history according to lobby group the Urban Taskforce.

Approvals for private sector detached houses increased by a seasonally adjusted 3% in May but that was nowhere near enough to offset a big drop in higher density home approvals.

“In May NSW saw a seasonally adjusted 35.7% drop in higher density home approvals following a 22.2% in April,” Urban Taskforce chief executive Aaron Gadiel says.

“All up that’s a 50% drop in seasonally adjusted approvals for apartments and townhouses in just two months.

“In seasonally adjusted terms May was the worst month for NSW higher density home approvals since February last year.”

In the light of the figures Gadiel says the NSW Government may need to bring forward plans to review the state’s planning system and development levies.

According to Gadiel approval numbers are strong indicators of likely construction activity in around 18 months’ time.

“If these numbers do not improve the state’s housing supply and construction workforce may face greater difficulties in the not too distant future,” he said.

The decline in NSW home approvals led a 7.8% national decline in May.

Victoria’s private sector home approvals fell by a seasonally adjusted 18.4% in May but the state still recorded its second best May in ABS record-keeping history.

Queensland recorded a 3.4% seasonally adjusted increase after a 34.3% correction in April, but neither of those increases were strong enough to make up for the decline since May last year.

National seasonally adjusted approval figures for private sector detached houses remained flat in May but higher density approvals fell by a massive 20.1%.

Victoria saw a seasonally adjusted 45.8% drop in private sector higher density approvals which followed 21.5% and 53.9% increases in the previous two months.

NSW saw a seasonally adjusted 35.7% drop in higher density approvals after a 22.2% drop in April.

In trend terms NSW’s private sector home approvals declined for four straight months, Victoria’s fell for eight straight months, Western Australia’s dropped for five straight months and Queensland trended positively in May for the first time in five months.

“If the Federal Government’s unable to pursue policies that will dampen interest increases then it must urgently act to reduce the costs of supplying new homes,” Gadiel says.

 “Otherwise the nation’s supply of new housing will literally dry up before our eyes.”