Downward trend for home approvals “locked in for six months”
Home approvals remain on a downward trend, and apartment construction is exacerbating the slowdown.
Figures from the Australian Bureau of Statistics show a 1.9% drop in the number of new home approvals. The decline was driven by a substantial slowdown in multi-unit construction, Housing Industry Association principal economist Tim Reardon said.
“It is the multi-unit sector of the industry that has slowed more quickly than detached homes. During the three months to May 2017, multi-unit approvals fell by 27.8% when compared with the same period in 2016,” Reardon said.
Reardon said the downward trend in home approvals “has now been locked in for six months”.
“This downward trend confirms our forecasts for a slowing in new residential building projects through 2017,” he said.
However, Reardon said the slowdown in apartment construction followed a “super-cycle” of multi-unit building that commenced in 2015. But he warned that the slowdown in home building could eventually lead to supply shortages.
“This slowdown is in stark contrast to the growing demands of first home buyers and the need to promote an increase in housing supply.”