2 August 2011
Figures released by the Australian Bureau of Statistics (ABS) today reveal that, in seasonally adjusted terms, June was the single worst month for new private sector home approvals since August 2009.
The Urban Taskforces chief executive, Aaron Gadiel, said that new private sector home approvals fell by a seasonally adjusted 3.6 per cent in June, reflecting a 3.2 per cent drop in detached housing approvals and a 4.2 per cent drop in apartment and town house approvals.
The biggest losses occurred in Queensland, which suffered a 17.4 per cent drop in new private sector home approvals, Mr Gadiel said.
NSW received a small 3.7 per cent increase in new private sector home approvals, but this wasnt enough to make up for big drops in approvals in April and May.
In NSW private sector home approvals have fallen by 23 per cent since March this year.
NSW just experienced its second worst June for private sector home approvals since 1984.
Mr Gadiel said that Victoria enjoyed a 5.1 per cent jump in new private sector home approvals.
That gives Victoria its third best June ever, he said.
Western Australia saw a 1.9 per cent dip in its rate of new private sector home approvals.
Monthly approval figures can be volatile, so the ABS also produced trend figures, which smooth out the big month-to-month shifts to get a better picture of where numbers are heading.
In trend terms, new private sector home approvals fell nationally by 1.4 per cent in June, reflecting a large 4.8 per cent fall in NSW, a 1.7 per cent fall in Victoria, a 0.7 per cent fall in Western Australia and a 0.6 per cent increase in Queensland.
NSW is clearly experiencing a very rapid fall-off in new home approvals, Mr Gadiel said.
In trend terms, NSWs home approval rate is plummeting much faster than any comparable state, and at more than three times the national rate.
Mr Gadiel said that the value of Australias non-residential buildings, such as new retail, office and other business premises fell by 1.3 per cent in seasonally adjusted terms.
June saw a 23.3 per cent fall in NSW, a 0.2 per cent fall in Victoria, a 7.5 per cent fall in Queensland and a 70.7 per cent increase in Western Australia.
Theres clearly a NSW problem, because the value of non-residential building approvals has fallen by 57 per cent since March.
In the same period, Victorias has increased by 5 per cent.
Of all the states, in trend terms, NSW is suffering the sharpest decline in the approval value of new business premises.
Mr Gadiel said the seven interest rate increases seen since October 2009 have damaged the nations supply of new buildings.
Both residential and commercial developments have been hit, through its impact on buyers, and the higher holding costs for developers, he said.
It would be naive to think that we can avoid significant social and economic consequences if this situation is not quickly addressed.
˜Interest rate cuts need to be firmly on the Reserve Banks agenda.
Mr Gadiel said that other problems in the building sector could not be ignored.
The market has responded differently across the country and its not just down to the resource versus the non-resource states.
For example, Victorias more rational planning system and low development levies are still delivering better outcomes on the ground for home buyers, working people and shoppers.
In June Victoria managed to approve close to 4,700 new private sector homes, while NSW approved just over 2,200. Even Queensland approved more new private sector homes than NSW.
Mr Gadiel said that state governments needed to take a hard look at their town planning laws.
Governments in the problem states should urgently act to reduce the costs of supplying new homes and business premises.
The Urban Taskforce is a property development industry group, representing Australias most prominent property developers and equity financiers.
