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Building approvals made a modest 1.1 per cent decline in trend terms in October, as the flow of new homes approved for construction continues to recede.
According to monthly Australian Bureau of Statistics data, a total of 17,070 homes were approved for construction in October, 1.5 per cent fewer than in the previous month and 13.2 per cent fewer than in October 2017.
The decline in total approvals was driven by multi-unit homes, which declined by 5.4 per cent, while detached house approvals increased by 1.7 per cent.
“The trend for total dwellings has been steadily declining over the past twelve months,” ABS director of construction statistics Justin Lokhorst said.
Related: Australian House Prices Fall at Fastest Pace Since GFC
Building Approvals - Australia
“The decrease in October was mainly driven by private sector dwellings excluding houses, which fell 1.8 per cent while private sector houses also declined, by 0.5 per cent.”
Total approvals weakened in every Australian state compared to the levels of a month earlier.
Dwelling approvals fell in October fell most sharply in the Northern Territory by 12.5 per cent.
Queensland's approvals dropped by 2.9 per cent while New South Wales remised by 2.3 per cent.
Victoria and the Australian Capital Territory were the only states to record an increase in dwelling approvals in trend terms, while Tasmania remained flat.
Related: Weak Market Conditions to Impact House Prices: Report
Seasonally Adjusted Building Approvals Oct 2018
| October 2017 No. | Sep 18 to Oct 18 % | Oct 17 to Oct 18 % | |
|---|---|---|---|
| Total dwelling units approved | 17,070 | -1.5% | -13.4% |
| Private sector houses | 9,712 | 2.7% | -4.1% |
| Private sector dwellings excluding houses | 7,199 | -4.8% | -22.2% |
ABS data revealed approvals to build private sector homes rose by 2.7 per cent to 9,712 dwellings, while non-housing dwellings dropped by 4.8 per cent to 7,199 dwellings.
Over the year, approvals to build private sector houses fell by 4.1 per cent with non-housing dwelling approvals slumping by 22.2 per cent from October 2017.
“With housing finance increasingly difficult to access and home prices in Sydney and Melbourne continuing to decline, the flow of new homes being approved for construction continues to recede,” HIA economist Diwa Hopkins said.
“A downturn in new home building has long been anticipated.”
“The current credit squeeze however risks the pace and magnitude of the decline developing into something faster and greater than expected.”
Despite the decline in total approvals in October, the ABS said the value of residential building work approved rose by 2.8 per cent in October after seasonal adjustments.
The value of residential building rose 2.1 per cent over the year, while the value of non-residential building rose 4.0 per cent.
