Data released by the ABS shows there has been a decline in housing and apartment approvals over May 2017, raising questions on growing demands for housing by first-home buyers.
The number of dwellings approved fell 1.9 percent in May 2017. In seasonally adjusted terms, approvals for construction of new homes fell by 5.6 percent in May, driven by a fall in total dwellings excluding houses (12.6 percent), while total house approvals rose 0.4 per cent.
The Master Builders Association says this downward trend started mid last year, with dwelling approvals over the year down by 31.3 per cent.
Matthew Pollock, National Manager Economics and Housing said, “Recent work by Master Builders shows the Government’s housing affordability measures, as announced in the May Budget, could support the construction of up to an additional 100,000 new homes over the next four years. As such we urge the Parliament to pass these measures in full to support housing affordability and keep homeownership within reach of ordinary Australians.”
Mr Pollock also said the high auction clearance rates in Sydney and Melbourne suggest there are still pockets of high demand and low supply, and he expressed concern that low supply could once again push up house prices and affordability issues for first-home buyers.
The Housing Industry Association’s principal economist Tim Reardon also noted the multi-unit sector of the industry has slowed more quickly than detached homes.
“This downward trend confirms our forecasts for a slowing in new residential building projects through 2017,” Mr Reardon said.
“During the three months to May 2017, multi-unit approvals fell by 27.8 per cent when compared with the same period in 2016. It is important to note that this dramatic slow-down in multi-units is off the back of the super-cycle of apartments that commenced in 2015.
“The amount of work that is still under construction means that the residential building industry will continue to operate at high levels well into 2018. This slow-down is in stark contrast to the growing demands of first home buyers and the need to promote an increase in housing supply.”
Across the states: Tasmania is the only state with a growth in approvals compared to the same quarter in 2016, up 6.9 per cent. New South Wales (down 22.4 per cent); Victoria (down 11.6 per cent); Queensland (down 21.6 per cent); Western Australia (down 18.4 per cent); the Northern Territory (down 51.3 per cent) and the ACT (down 36.2). South Australian approvals are just 6.1 per cent below the same levels in 2016 due to a large number of multi-unit apartments getting the green light.