Are new housing levels heading for GFC lows?

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With building approvals falling to their lowest level in nearly three years, concerns are being raised that new housing levels could be heading for GFC lows.

According to recently released figures from the ABS, seasonally adjusted dwelling approvals fell by 7.8% in February. New South Wales saw the biggest fall (-41.2%) but rises were seen in Queensland (13.0%), South Australia (10.1%), Tasmania (10.0%), Western Australia (5.7%) and Victoria (1.1%) in seasonally adjusted terms.

Nevertheless, the Housing Industry Association (HIA) has been quick to point out that building approvals have fallen to their lowest level in nearly three years (since March 2009), and has raised the concern that building approvals “will again plumb the depths experienced around the GFC”.

“Today’s building approvals outcome is, quite frankly, woeful, even allowing for New South Wales virtually driving the entire fall. It is difficult to be positive about the short term prospects for new housing when a 7.8% decline in building approvals in February 2012 takes them to their lowest level since March 2009," said HIA chief economist Harley Dale.

"Furthermore, the level of approvals over the three months to February implies annual housing starts hitting a level lower than the GFC trough of 2008/09."

What do falling building approvals mean for Australia’s property market? Have your say on our property investment forum.

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