The recent recovery in national housing prices is yet to flow through to new building approvals, after approvals recorded a fall of 8.1 per cent in October, reveals the latest Australian Bureau of Statistics figures.
New dwelling approvals fell by 8.1 per cent from September to 13, 049, according to the seasonally-adjusted figures, driven by a 11.3 per cent drop in private dwellings such as apartments and townhouses.
The ABS stats, which covers all states and territories, shows private sector houses dropped 7 per cent from September, seasonally-adjusted.
Victoria and New South Wales both saw monthly approvals for houses fall to their weakest level since 2013 and 2014, BIS economist Maree Kilroy said.
“As expected, all eastern seaboard states saw a weaker detached house result, with the continued leg down in greenfield land sale volumes coming through in the October data,” Kilroy said.
Despite the recent recovery in residential property prices, BIS does not expect an upturn in approvals until the June quarter next year.
HIA economist Angela Lillicrap said that recent government policy announcements in Western Australia had quickly transferred to more approvals.
“As demonstrated by a 35.5 per cent increase in multi-unit dwellings for the three months to October.
Lillicrap says that this should flow through to more work on the ground in 2020.
Amid the slowing sector, Property Council of Australia chief executive Ken Morrison said the October result “demands a response from all levels of government”.
“While a lot of attention is being paid to the recent recovery in housing prices, the story with the big impact on jobs and GDP is the continued decline in housing approvals,” Morrison said.
“As the ABS notes, this was the 23rd month where dwelling approvals had fallen.
“It’s also a flashing warning light for the future housing affordability, especially in our largest cities.”