Building approvals fell in October in a further sign that new home building recovery may lack the scale required to plug Australia’s housing shortage.
According to the Housing Industry Association’s chief economist Dr Harley Dale, building approvals levels currently implied around 145,000 housing starts per year, well short of the new homes required to meet Australia’s rapidly growing population.
“It is encouraging to see signs of a new home building recovery, but then after five years of trend decline in residential construction you would certainly hope to be seeing some evidence of a turnaround,” he said.
“We are, however, looking at a moderate rather than strong lift in new home building in 2010. This disappointing outlook will remain in play until such time as credit constraints on medium and high density developments are eased and until supply side obstacles including inequitable taxation of new housing and re-emerging land supply shortages are effectively tackled.
“In the meantime an acute shortage of new housing stock will persist, generating undue pressure on rents and on existing home values.”
Total seasonally adjusted building approvals eased by 0.7 per cent in the month of October, driven by a 17.9 per cent drop in multi-unit approvals.
Detached house approvals increased by 5.7 per cent following an upwardly revised 1.1 per cent gain in September.
The number of seasonally adjusted residential dwelling approvals increased in October by 10.5 per cent in Tasmania, 9.7 per cent in Western Australia, and 4.2 per cent in Queensland.
Approvals dropped by 10.2 per cent in New South Wales, 4.5 per cent in South Australia and 0.3 per cent in Victoria.