The start of March brings some positive news for Australia’s property market, with building approvals bouncing back, while the pace of house price decline eased slightly over the month.
The rise in home building permits marks the first time since September the ABS figures have improved.
Despite the pace of decline slowing in February, house prices in six of the eight capital cities fell, while Sydney’s housing market moved into double digit annual declines for the first time since the 1980s.
According to Corelogic’s monthly national home value index Sydney’s house prices recorded a 10.4 per cent annual fall.
“If Melbourne’s downturn continues at a similar pace we are likely to see the annual decline move into double digit falls over the coming months as well, with values currently 9.1 per cent lower over the year,” Corelogic head of research Tim Lawless said.
“The February housing market results marked a subtle improvement in the rate of decline, however the housing market downturn is now more widespread geographically.”
Lawless pointed out that house values had not yet bottomed out and that values will continue to “broadly decline” over coming months.
Home building approvals lifted slightly in January, rising 2.5 per cent to 14,365.
The life in home building permits is the first time in four months ABS figures have recorded a lifted.
The rebound was driven by new houses and other residential dwellings. Apartments recorded a slight 3.8 per cent lift from the month prior.
HIA chief economist Tim Reardon said that the uplift offset some of the significant drop in approvals experienced in December.
“Despite the small increase this month, the pipeline of building work is now being reduced as the number of approvals slowed through the course of 2018,” Reardon said.
Approvals are still down 28.6 per cent from a year prior.