Slump in building approvals adds to Tasmania's property woes

Building figure approvals for April put out by the Australian Bureau of Statistics have added more gloom to Tasmania’s property woes, with the Master Builders Association describing the market as “horrific”.

Total dwelling approvals in Tasmania on a seasonally adjusted basis fell 8.7% in April, according to figures put out by the ABS. This is more than six times higher than the national average, which was -1.3% for the month of April. The national average for dwelling approvals rose 8.6% in the previous month.

In absolute terms, dwelling approvals slumped 29% in Tasmania. Master Builders Tasmania executive director Michael Kerschbaum told The Mercury this was a “horrific” result.

The latest data heaps more gloom on the embattled state, after the latest RP Data-Rismark report revealed that the value of Hobart homes fell by 2% to a median price of $315,000 in the three months to April.

According to hotspotting.com.au’s Terry Ryder, Hobart is the capital city market with the weakest prospects. “The state economy and population growth are weak, and the political situation is unhelpful,” Ryder says. “The market is likely to fall further.”

Louis Christopher, property analyst and director of SQM research, says Hobart is currently in a downswing, with stock levels on the rise. However, he does not expect dramatic price drops due to the fact that “incomes to house prices appear to be fair”.

Not only is new home construction falling, but the quality of homes being built has been called into question following a Sunday Tasmanian investigation that revealed that new-home owners were falling prey to shonky builders using false accreditation details and were being left with defective and incomplete houses.

According to the newspaper, builders have been "shopping out" their licences to unregistered tradesmen for up to $25,000.