The Urban Developer
AdvertiseEventsWebinarsUrbanity
Industry Excellence
Urban Leader
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
JOIN US FOR A ONE-DAY DEEP DIVE INTO THE FUTURE OF THE INDUSTRIAL SECTOR
FIND OUT HOW THE INDUSTRIAL MARKET IS CHANGING IN 2026
LEARN MOREDETAILS
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
Resources
Terms & Conditions
Commenting Policy
Privacy Policy
Republishing Guidelines
Editorial Charter
Complaints Handling Policy
Contact
General Enquiries
Advertise
Contribution Enquiry
Project Submission
Membership Enquiry
Newsletter
Stay up to date and with the latest news, projects, deals and features.
Subscribe
ADVERTISEMENT
SHARE
13
print
Print
ResidentialAna NarvaezMon 26 Aug 19

Apartment Construction Downturn Has 12pc Further to Run: HIA

e9019e98-685a-409f-bff9-bff49972fbce

The lag between residential building approvals and actual commencements has made it difficult to forecast exactly when the housing market will bottom out.

Credit curbs continue to weigh on activity while the construction slump—sitting at around 33 per cent from peak-to-trough to date—has been wider than expected.

Adding to the conjecture, HIA’s latest national outlook has forecast the market to stabilise at around 20 per cent below the peak.

“If economic activity improves, the credit squeeze dissipates, home prices stabilise and the recent stimulus measures take hold, the supply of new work into the pipeline will soon reach its low point,” HIA chief economist Tim Reardon said.

The latest ABS figures show building approvals for the 2018-19 fiscal year are down 19.5 per cent.

The industry association said that housing approvals are experiencing the sharpest contraction since the introduction of the GST in 2000 when the market corrected 43 per cent in less than a year.

HIA said that the detached housing market appears to have held up well due to the lag between the sale and commencement of houses—detached housing approvals were down 9 per cent.

“A large number of the houses that commenced during the [second] quarter were purchased off-the-plan some time ago, as far back as 2017 in some markets,” the report said.

“This gives the impression that contemporary market conditions are stronger than is the case.”


Building approvals: ABS



Apartment approvals were significantly harder hit, with the number of high-rise residential approvals—buildings of more than 4-storeys—experiencing a 41.8 per cent contraction.

HIA forecasts a further 7.6 per cent decline for house markets, primarily in the first half of the fiscal year, which is set to stabilise over the following two years.

For apartments, HIA estimates a further decline of 12 per cent in 2019-20 before a slow improvement in 2021-22.

Separately, economic forecaster BIS estimates the residential construction downturn has a further 8 per cent to run, with a strong rebound in 2020-21.

“The number of apartments under construction will continue to fall as more projects reach completion and fewer new projects enter the pipeline,” Reardon said.

“The silver lining to this contraction is that there is a convergence of conditions under way in the building industry.

“We no longer have a boom in east coast capitals and stagnating markets elsewhere.

“Interest rates, income taxes and lending restrictions have all been eased in an effort to support activity and economic growth, [which] are now supporting activity in housing markets across the economy.”

ResidentialAustraliaConstructionConstructionSector
AUTHOR
Ana Narvaez
The Urban Developer - Editorial Director
More articles by this author
ADVERTISEMENT
TOP STORIES
Multiplex Moderna facility
Exclusive

Industrial Subsectors Win Investor Attention as Demand Blossoms

Clare Burnett
7 Min
Bee Bricks hero
Exclusive

Beyond Green: The Rise of Net-Positive Architecture in Australia

Clare Burnett
7 Min
Exclusive

Central Element Hotel Debut Spearheads Oxford Street Renewal

Taryn Paris
8 Min
London skyline near the walkie talkie tower showing the 85 gracechurch street development.
Exclusive

Basilica to Business: London Office Tower’s Historic Rework

Renee McKeown
6 Min
Hotel Indigo Adelaide hero
Exclusive

Neighbourhood Hotels Reinvent Urban Hospitality

Clare Burnett
5 Min
View All >
Woden Village hero
Residential

Hellenic Club Plots 200-Home Stage for ACT Masterplan

Clare Burnett
Investa Approved Commercial 105-153 Miller Street North Sydney
Office

Investa Pursues Twin Strategy for North Sydney MLC Tower

Vanessa Croll
Leeka 188 Commercial Road Prahran HERO
Residential

Leeka Wins Nod for 32-Home Project at Prahran

Leon Della Bosca
The 32-home development in partnership with Beulah will rise opposite a landmark food market in Melbourne’s south-east…
LATEST
Woden Village hero
Residential

Hellenic Club Plots 200-Home Stage for ACT Masterplan

Clare Burnett
2 Min
Investa Approved Commercial 105-153 Miller Street North Sydney
Office

Investa Pursues Twin Strategy for North Sydney MLC Tower

Vanessa Croll
5 Min
Leeka 188 Commercial Road Prahran HERO
Residential

Leeka Wins Nod for 32-Home Project at Prahran

Leon Della Bosca
2 Min
Development

Rare Newcastle Wharf Project Now Accepting EOIs

Partner Content
3 Min
View All >
ADVERTISEMENT
Article originally posted at: https://www.theurbandeveloper.com/articles/housing-approvals-at-lowest-levels-since-the-introduction-of-gst-