The most recent building approval figures from the Australian Bureau of Statistics revealed that the detached house building sector has plateaued at a high level while the building of multi-unit projects is sliding.
HIA Principal Economist Tim Reardon said the ABS released July Building Approval data which shows that the paths of detached and multi-unit residential building continue to diverge as the industry’s contribution to GDP is set to fall.
“Multi-unit sector approvals fell by 3.3 per cent to be 27.5 per cent lower than twelve months ago while detached house building approvals remained constant over the year," he said.
“Detached home approvals were 2.4 per cent better in July this year than compared with July 2016.
“The slowdown in the multi-unit sector is also showing up in the amount of work done on all residential sites has fallen by 3.2 per cent in the first half of this year, based on the construction data also released by ABS."Reardon said the slowdown in on-site activity was likely to see residential building have a negative impact on GDP growth for the June quarter, but there is also significant variation in residential building conditions around the country.
“Compared with a year ago multi-unit approvals in July were down by 20 per cent or more in all the eastern states while movements in detached home approvals included a 9.6 per cent increase in South Australia to a fall of 8.7 per cent in Western Australia," Reardon said.
“The significant variation in industry conditions between the multi-unit sector and detached homes and around the states is likely to continue for some time, consistent with HIA’s latest forecasts."