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Approvals to build new homes fell to the lowest level in 11 years, weighed down by fewer permits for apartment and townhouse buildings.
Dwelling approvals clocked in at just 11,594 in seasonally adjusted terms in April, according to the Australian Bureau of Statistics (ABS), representing a monthly decline of 8.1 per cent.
The latest monthly figures bring housing approvals to their lowest level since April 2012, when 10,860 dwellings were greenlit.
ABS head of construction statistics Daniel Rossi said the decline was driven by a decline in approvals for private sector dwellings including terrace houses and apartments, which after falling by 16.5 per cent, are now at their lowest monthly level since January 2012.
Housing Industry Association (HIA) senior economist Tim Reardon said the latest figures showed the continued “long-lagged response” of Australian home buyers to the Reserve Bank of Australia’s interest rate hiking cycle, with the expert forecasting further declines expected in the coming months.
“Detached house approvals declined by 3.6 per cent in the month of April and multi-units fell by 16.9 per cent. On a quarterly basis, this leaves detached house approvals 15.4 per cent lower than the same time the previous year, and multi-units down by 38.9 per cent,” HIA senior economist Tom Devitt noted.
Private sector house approvals also continued to decline, falling 3.8 per cent in April, following a 3.7 per cent decrease in March.
Total dwelling approvals across Australia showed a mixed trend, with declines observed in Queensland (-22.8 per cent), Victoria (-18.6 per cent), and Western Australia (-5.8 per cent). However, there were increases in South Australia (+19.8 percent), NSW (+12.5 per cent), and Tasmania (+3.5 per cent).
Meanwhile, approvals for private sector houses fell in Victoria (-9.3 per cent), Queensland (-6.0 per cent), and NSW (-1.7 per cent) in April, while South Australia (+10.8 per cent) and Western Australia (+0.1 per cent) recorded gains during the period.
Mr Reardon highlighted that the combination of “construction cost blowouts, labour uncertainties, increased compliance costs and taxes on investors” has seen approvals for multi-units fall.
“These disappointing approvals numbers are occurring as population growth surges with the return of overseas migrants, students and tourists,” he noted.
He cautioned the imbalance in supply will “see the affordability and rental crisis deteriorate further”.
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