Despite tightening rental markets and a housing supply shortage, building approvals fell by almost 2% in August, according to the latest data from Australian Bureau of Statistics.
HIA’s Chief Economist, Harley Dale, said that the downturn in building approvals was the longest seen by the industry in 24 years.
“It has never taken approvals this long to mount a sustainable recovery, and that is a clear reflection of the brake that record low housing affordability is exerting on the new home building sector,” Dale said.
“A rate hike and the full impact of the global credit crunch striking certainly weren’t positives for approvals in August. However, it’s the hefty supply constraints on residential construction that are preventing a recovery in the housing sector.”
HIA figures show that dwelling approvals declined by 1.7% in August 2007 to reach a level of 12,751.
Apartment approvals dropped by 7% to fall back below the 4,000 mark for the first time in three months, reaching a level of 3,811. Approvals for detached houses inched up by 0.7% to 8,852, which was 2.3% lower than approval levels the year earlier.
Despite an overall decrease in building approvals across the nation, Dale said some states and territories were experiencing slight increases in activity, with approvals up by 2.5% in Victoria, 0.9% in the NT, 0.5% in Queensland and 0.3% in SA.
Approvals dropped in all other states, falling by 3.4% in Tasmania, 2% in WA, 0.9% in NSW, and 0.8% in the ACT.
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