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Rocky ground for building approvals

Building approvals fell by 3.7% in the three months to October 2019 after several months of positive growth according to HIA Economist Angela Lillicrap. The Australian Bureau of Statistics recently released its monthly building approvals data covering all states and territories. Source: Timberbiz

“The decline in building approvals for the recent three months to October was broad-based with both houses and multi-units declining by 3.4% and 4.2% respectively. Approvals are now 19.7% lower than the same time last year,” Ms Lillicrap said.

“The declines over the past year have been driven by underwhelming economic conditions and a tighter credit environment.

“It is evident that the pick-up seen in other indicators including housing finance and new home sales is yet to flow through to building approvals. With healthier conditions in the established home market, we are optimistic that we will see improvement the new home market in the coming months.

“Recent government policy announcements in Western Australia have quickly transferred to more approvals as demonstrated by a 35.5% increase in multi-unit dwellings for the three months to October. This should flow through to more work on the ground in 2020.”

In seasonally adjusted terms, building approvals for the month of October 2019 declined in New South Wales (-16.4%) and Queensland (-10.2%). Victoria increased by 5.7% and South Australia increased by 14.7%. Western Australia offset previous monthly declines and increased by 11.5%. In trend terms, approvals in the Northern Territory declined by 11.1% while the ACT increased by 3.1%.