The Australian Bureau of Statistics (ABS) recently reported that detached house approvals dropped by 2.1% over the month of September, marking the weakest monthly result of detached house approvals since December 2013.
Apartment and other dwelling approvals, meanwhile, saw a 10.7% rise.
According to Master Builders Australia (MBA) Chief Economist Shane Garrett, this downward trend is an "unwelcome milestone," noting that it is a reflection of unfavourable factors in the market.
He added that declining house values in select cities are also making an impact on the current trend.
“House prices are continuing to fall in Australia’s two largest markets and this makes it more difficult to deliver new housing supply. The results of last week’s MBA industry survey also demonstrated how the ongoing Royal Commission has led to tougher financing conditions in recent months,” Garrett said.
A closer look on the data revealed that the level of new home building over the last five years has significantly improved the capacity of the economy by boosting the number of construction jobs, as well as allowing more workers in all sectors to build homes.
However, with home building activity beginning to slow down, Garrett underscored the importance of government policies that specifically permit the building industry to provide adequate new homes to match demand moving forward.
For reference, the largest hike in approvals for new dwellings last month was observed in Victoria, which was up by 30.5%. Coming second and third were Tasmania (+15.7%) and South Australia (+7.8%), respectively.
On the other hand, the biggest decrease in approvals was apparent in Western Australia (-19%), followed by Queensland (-10.5%) and the Australian Capital Territory (-8.4%). Fewer approvals also took a toll on New South Wales (-6.8 %) and the Northern Territory (-6.9%).
