Australian Bureau Of Statistics (ABS) released January’s figures this week showing that building approvals had a slow start to 2016.
The figures showed that new home approvals declined by 7.5 per cent overall which is made up from a reductions of 6.1 per cent in detached house approvals and a drop of 9.1 per cent in multi-unit approvals.
The ABS also reported that the value of residential buildings fell 11.4 per cent and non-residential building declined by 9.2 per cent following on from its previous drop in December.
CommSec economist Savanth Sebastian stated “It is clear that a consolidation is taking place in terms of new home building which is a prudent outcome in a number of states,”
“From a longer-term sense, the lift in home building over the past couple of years has been extraordinary. Over the past year 231,752 new homes were approved – a boom that will continue to support economic activity over the next 12-18 months.”
Commonwealth Bank Of Australia senior economist John Peter also agreed with Savanth Sebastian by saying “pipeline of construction activity will promote stronger performances and outcomes in the jobs market and retail trade activity (particularly for household goods retailing)”.
New South Wales saw the biggest total seasonally adjusted new home building approvals decline with -22.9% followed by Queensland (-13.4%) and Tasmania (-11.1%). Some states saw positive growth with South Australia (+14.2%), leading the way with Western Australia (+7.2%) and Victoria (+2.9%) all seeing an increase in new home building approvals.
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