Building Approval Decline Gains Pace

Home approvals declined again sliding 8.1 per cent in July.

The slump comes after a 7.9 per cent decrease the previous month, according to data by the Australian Bureau of Statistics (ABS).

ABS head of construction statistics Daniel Rossi said the fall in total number of homes approved had been driven by a decrease in private sector homes excluding houses, which fell 15.8 per cent, following a 21.9 per cent fall in June.

“Approvals for private sector houses remained flat, following a 1.0 per cent fall in June,” he said

Total homes approvals fell in most states: Victoria (-18.3 per cent), Queensland (-5.5 per cent), Western Australia (-5.2 per cent), New South Wales (-4.7 per cent), and South Australia (-2.6 per cent).

Tasmania rose 39.5 per cent after falling 36.6 per cent in June.

Approvals for private sector houses were mixed across the states, with rises in Western Australia (6.0 per cent) and Queensland (5.0 per cent).

South Australia (-9.1 per cent), Victoria (-4.0 per cent), and New South Wales (-3.0 per cent) fell in July.

The value of total building approvals fell 16.9 per cent, after a 7.2 per cent June increase. The value of total residential building fell 4.4 per cent, comprised of a 5.1 per cent fall in new residential building and a 0.4 per cent decrease in alterations and additions.

The value of non-residential building approved fell 27.8 per cent in July, following a 28.6 per cent increase in June. 

CPI rise slows

Meanwhile, the monthly Consumer Price Index (CPI) indicator rose 4.9 per cent in the 12 months to July 2023, according to the ABS.

ABS head of prices statistics Michelle Marquardt said this month’s annual increase of 4.9 per cent was down from 5.4 per cent in June.

“Annual price rises continue to ease from the peak of 8.4 per cent in December 2022,” she said.

The most significant contributors to the July annual increase were housing (7.3 per cent), and food and non-alcoholic beverages (5.6 per cent).

Reducing the July increase were price falls for automotive fuel (-7.6 per cent) and fruit and vegetables (-5.4 per cent).

“CPI inflation is often impacted by items with volatile price changes like automotive fuel, fruit and vegetables, and holiday travel,” Marquardt said.

“It can be helpful to exclude these items from the headline CPI indicator to provide a view of underlying inflation.

“When excluding these volatile items, the decline in annual inflation is more modest at 5.8 per cent in July, compared to 6.1 per cent in June.”