Slow Apartment Market Weighs on February Building Approvals

The number of home building permits fell 6.2 per cent in February, thanks to a significant decline in apartment approvals.

Dwelling approvals fell for a fifth consecutive month, with apartment permits marking a drop of 16 per cent over the month according to ABS’ monthly building approval figures released Wednesday.

With the pace of decline easing in detached houses – approvals rose 2.3 per cent in February to 10,251 – high-rise apartments continue to be hardest hit. Over the 12 months to February, approvals for buildings of four-storeys or more declined 15 per cent.

Related reading: Building Approvals Fall 20% in December

"The decline in total dwellings was driven by private dwellings excluding houses, which have fallen for five consecutive months,” ABS director of construction statistics Justin Lokhorst said.

Australia’s housing market outlook remains soft, with declining investor activity leading to weakening conditions in Sydney.

Approvals to build or renovate houses and apartments declined by 3.1 per cent from a year earlier.

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The fall in building approvals in February was widely expected by economists, but was more than the 5 per cent forecast.

In maintaining the cash rate on Tuesday, Reserve Bank Governor Philip Lowe pointed out that housing markets in Sydney and Melbourne had slowed.