Building approvals slump to 8-year low
Building approvals data is yet to show the impacts of the federal government’s HomeBuilder grants, with the latest figures from the Australian Bureau of Statistics revealing approvals hit an eight-year low in June.
Total dwelling approvals fell 4.9 per cent in June, with double digit falls recorded in New South Wales (14.8 per cent), Western Australia (11.7 per cent), Queensland (10.9 per cent) and Tasmania (10.8 per cent).
South Australia and Victoria were the best performing states, with approvals down 4.6 per cent and 0.2 per cent, respectively.
“The impact of COVID-19 was evident on dwelling approvals in June,” ABS assistant director of construction statistics Bill Becker said.
“Falls were recorded in all states, and across both detached and attached dwellings.”
The ABS data laid bare the challenges facing apartment developers across Australia, with approvals for private sector dwellings excluding houses down by 30.5 per cent, as compared to the same time last year.
Detached housing approvals were down 7 per cent year-on-year, the ABS said.
Housing Industry Association senior economist Geordan Murray said the impact of COVID-19 restrictions continued to weigh on new homebuilding in June, with the cumulative decline in approvals over the last two years significant.
“The COVID-19 shock has occurred on top of a well advanced cyclical downturn in home building activity that began back in 2018,” Mr Murray said.
“Dwelling approvals during 2019 had already declined by 17.3 per cent compared to 2018.
“Since February this year, monthly dwelling approval have fallen a further 22.9 per cent.”
Mr Murray said the data had yet to show any stimulus from the federal government’s $25,000 HomeBuilder grants, which were announced in early June.
“HIA anticipates building approvals data will continue to fall for a number of months, before HomeBuilder halts the decline,” he said.
“HIA’s New Home Sales Survey showed an immediate lift in sales during June and early signs suggest July was another strong month for sales.
“Progressing a building project to the point where the building plans are approved takes time.
“The lift in sales following the announcement of HomeBuilder will become evident in approvals data later in the year.”