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Fresh Australian Bureau of Statistics (ABS) data has found building approvals, particularly in the apartment market, are still undergoing a cool period.
According to the ABS’ monthly building approvals data, across all states and territories, approvals in the three months to July 2019 were down by 10.5 per cent from the previous three months.
“Building approvals continued to cool, particularly in the apartment market,” HIA economist Tom Devitt said.
“This decline was led by multi-unit approvals which were down by 20.2 per cent, with detached house approvals down by 3.0 per cent.”
Despite the rapid contraction in approvals for multi-units, there remains a large volume of apartments under construction, Mr Devitt said.
“Developers are delaying seeking approval for apartments at this phase in the cycle, until the record number of apartments that are currently under construction are completed.
“The downturn in detached house building is more modest in scale, but it remains a sharp downturn.
“This is a further indication that we have not yet reached the bottom of this market cycle, with the July quarter sitting 24.1 per cent down from the same quarter last year.”
Recent interest rates cuts, alongside a tax cut and the repeal of regulatory restrictions, are “still expected to encourage increased activity in the home building market”, Mr Devitt added.
“These measures, combined with ongoing stable population and employment growth, should see approvals improve towards the end of the year.”
Specific stats
Breaking down the states and territories, the research found seasonally adjusted building approvals in July 2019 were up by 34.8 per cent in South Australia.
Likewise, they were up in Tasmania by 21.5 per cent, 10.9 per cent in Queensland and 5.8 per cent in Western Australia.
Oppositely, approvals saw a decline of 24.3 per cent in Victoria, 17.5 per cent in NSW and 22.4 per cent in the ACT.
Meanwhile, approvals in July were steady in the Northern Territory, the research found.
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