Residential building approvals eased slightly in October, from a three and a half year high in September, according to the Housing Industry Association (HIA).
Despite the fall, HIA chief economist Dr Harley Dale said the new housing approvals data is still very promising.
“All things considered, this is a healthy update for this key leading indicator of new home building activity,” he said.
“After a modest decline of 1.8 per cent in October, total residential building approvals are still at their second highest level since March 2010,” he added.
Dr Dale said the October results varied considerably amongst the states.
“There were wide variances in the October approvals results, including strong growth in Victoria and Queensland helping to offset a dip in New South Wales,” he said.
Growth in total seasonally adjusted building approvals was strongest in Victoria at 23.4 per cent, followed by Tasmania at 19.7 per cent and Queensland at 10.5 per cent while approvals dropped by 33.5 per cent in New South Wales and fell by 6.0 per cent in Western Australia.
Dr Dale noted the need for housing construction to continue its strong momentum in the near term as well as further into the future.
“In the decades ahead Australia will need to build a considerably higher number of homes per annum than we have averaged over the last 20 years.
“Current momentum suggests we are taking a big first step in this regard,” he said.
“We won’t make the final destination without a concerted focus on reducing the structural barriers to a sustainable lift in new housing supply. With a first round new home building recovery underway, now is the time to embark on that program of policy reform,” concluded Dr Dale.