Approvals for new apartments or units declined by 18.6% in December, hitting their lowest level since July 2012.
The weak result was brought about by tax rates for foreign investors, a record supply of apartments, falling house prices and the credit squeeze.
The latest data from the Australian Bureau of Statistics (ABS) also revealed that new home building approvals dropped 8.4% and detached house approvals were down by 2.1% during the period.
The largest decrease in new dwelling approvals was recorded in Tasmania (-24.3%). This was followed by the Australian Capital Territory, down by 21.3%. The volume of approvals also slid in New South Wales (-8.6%), Victoria (-8.1%) and Queensland (-5.8%).
New dwelling approvals rose in South Australia (+5.6%), the Northern Territory (+1.7%) and Western Australia (+1.1%).
“Today’s ABS figures complete the full 12-month picture for 2018. For the year overall, the volume of new home building approvals was pretty strong with over 212,000 permits issued for new dwellings. This was down only modestly (-5.6%) compared with the 2017 total,” said Shane Garrett, Master Builders Australia’s chief economist.
Garrett was more worried about the pace at which approvals have been declining over the recent months. Over the final three months of 2018, total approvals were 23.7% lower than the same period in 2017, with apartment approvals dropping by 40.1% during the period.
Garrett also said that providing some clarity on uncertainties about housing policy would help get the housing market back in the game.
“Faltering new home building activity has been occurring against the backdrop of falling house prices, the Royal Commission’s work and uncertainty about what housing policy will look like after May’s Federal Election,” he said.
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