Housing approvals hit seven-month low

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Evidence keeps piling up that Australia’s residential building boom is slowing, with figures showing new home approvals declined for the second consecutive month in June.

Figures from the Australian Bureau of Statistics (ABS) have revealed 18,693 new homes were approved over the month, a 2.9% fall compared to May.

June’s approval figures were also the lowest monthly total since November 2015 when just 17,828 new dwellings were approved.

“Today’s figures show that approvals are continuing to ease back from the record highs hit last year,” Housing Industry Association senior economist Shane Garrett said.

“Approvals on both the detached house and multi-unit side peaked in mid-2015. Since then, detached house approvals have glided lower in an orderly manner. Multi-unit approvals have continued to be resilient, although sit at levels slightly lower than a year ago,” Garrett said.

According to the AB S figures, detached housing approvals fell 2.4% over June, while multi-unit approvals fell 3.4%.

While approvals may be well past their peak, Garrett said there is still a strong pipeline of supply of new housing on its way and the slowdown in the sector will be gradual, rather than rapid.

“The immediate pipeline of new home building work is set to remain very solid, based on this latest approvals update,” he said.

“Recent approvals releases have also highlighted the considerable variation in new home building activity across the different states and territories. We expect the trajectory of new dwelling approvals to continue retreating at a modest pace over coming months.”

During June 2016, total seasonally-adjusted new home building approvals rose most strongly in South Australia (+12.4%), with increases also occurring in Victoria (+4.1%) and Western Australia (+2.5%).

Tasmania experienced the largest fall in approvals (-23.9%), with reductions also affecting New South Wales (-4.0%) and Queensland (-2.1%). In trend terms, approvals rose by 4.2% in the Northern Territory, but fell by 2.7% in the Australian  
 

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