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The number of dwellings that received a go-ahead for construction declined in March, making the first quarter of 2023 the weakest in terms of approvals since 2012.
According to the Australian Bureau of Statistics (ABS), the total number of dwellings approved declined 0.1% in March, down from the 3.9% rise in February.
The decline was due to the 2.8% fall in approvals for private sector houses. Approvals for this segment remained 15% lower than March 2022.
Meanwhile, approvals for semi-detached, row or terrace houses, townhouses, and apartments increased 5.6% in the month, reversing the 9.7% decline in February.
Over the quarter, however, overall dwelling approval declines were significant and apparent across almost all states and territories.
Declines were led by New South Wales (34.1%) and Victoria (26.6%), followed by Western Australia (14.9%), Tasmania (10.8%), and South Australia (5.7%).
Only Queensland reported a quarterly increase in building approvals at 8.6%.
Housing Industry Association senior economist Tom Devitt said the March approval results continue the long-lagged response of Australian homebuyers to the interest rate hiking cycle, with further declines expected in the coming months.
“The adverse impact of last year’s cash rate increases is still to fully flow through to the official data — further cash rate increases this year will have only added further weight to these declines,” Mr Devitt said.
“These disappointing approvals numbers are occurring as population growth surges with the return of overseas migrants, students and tourists.”
“This imbalance will see the affordability and rental crisis deteriorate further.”
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Photo by welcomia on Canva.
