New home approvals cycling down

Building approvals data for March 2017, released by the ABS indicate that residential building is set to slow, said the Housing Industry Association (HIA), the voice of Australia’s residential building industry.

HIA Acting Chief Economist Warwick Temby said “the 13 per cent decline in new dwelling approvals during March (seasonally adjusted) confirms HIA’s forecasts for a slowing in new residential building projects through 2017.

“From the record highs in approvals in 2016 the slowing in new projects is only to be expected.

“Also not surprising is that the multi-unit sector of the industry has slowed more quickly than detached homes.

“Multi-unit approvals have fallen 16 per cent when compared with an 8 per cent fall for detached homes in the March quarter 2017 when compared with the same quarter of 2016.

“Notwithstanding the slowing in new projects the amount of work currently under construction means that the residential building industry will continue to operate at high levels well into 2018.

“The declining level of new activity represents an excellent time for tomorrow’s Federal Budget to provide support for first home buyers and to promote more housing supply.

“Both New South Wales and Queensland saw approvals fall more than 20 per cent in March mostly from their multi-unit sectors, which had seen strong increases in February.

“Only Tasmania and South Australia recorded increases in approvals in March; up 13 percent and 0.3 per cent respectively. Falling approvals in the other states and territories included Victoria (-1 per cent), and Western Australia (-2 per cent). In trend terms, approvals contracted by 18.0 per cent in the Northern Territory with a decline of 7 per cent occurring in the Australian Capital Territory.

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