Building Approvals Still Low

Building Approvals Still Low

Building approvals enjoyed a slight increase during the month of October, but still remain too low according to the Housing Industry Association.

HIA Senior Economist, Tom Devitt, says ABS figures show in the past quarter approvals are down by 11.2% compared to the same quarter last year.

Devitt says the building pipeline is shrinking and in 2024 home builders will be starting construction on fewer new houses than at any other time in the past decade.

“We have known this was coming for over a year. Leading indicators like new home sales, housing finance, building approvals and consumer confidence have been depressed all year,” he says.

He predicts interest rate increases will suppress home building and spending across the broader economy next year but by more than is needed to get inflation to the RBA’s 2% to 3% target.

Compared with the same quarter last year, NSW approvals are down by -18%, Victoria -11.3%, Queensland -9%, South Australia -8.4% and Western Australia -0.6%.