Despite the many incentives in play to help potential home buyers, residential building approvals fell by an additional 4.9 per cent in June.
As HIA Senior Economist, Geordan Murray explains, this trend existed long before COVID-19.
“The COVID-19 shock has occurred on top of a well advanced cyclical downturn in home building activity that began back in 2018,” he said.
“Dwelling approvals during 2019 had already declined by 17.3 per cent compared to 2018.
“Since February this year, monthly dwelling approvals have fallen a further 22.9 per cent.
“The cumulative decline in new home approvals over the last two years is significant.”
Dwelling approvals dipped in all states during June, with NSW hit the hardest, with a decline of 14.8 per cent.
Western Australia dropped by 11.7 per cent, Queensland declined by 10.9 per cent, Tasmania declined by 10.8 per cent, South Australia fell 4.6 per cent, while Victoria declined by just 0.2 per cent.
Mr Murray said it’s still too soon to see the true results of government stimulus.
“The HomeBuilder program was announced in early June but it is still too early to see an impact in the approvals data,” he explained.
“HIA anticipate building approvals data will continue to fall for a number of months, before HomeBuilder halts the decline.
“HIA’s New Home Sales Survey showed an immediate lift in sales during June and early signs suggest July was another strong month for sales.
“Progressing a building project to the point where the building plans are approved takes time. The lift in sales following the announcement of HomeBuilder will become evident in approvals data later in the year,” concluded Mr Murray.