March figures from ANZ and the HIA have revealed a fall in approvals for residential building, which more than offset the increases in the previous two months.
According to recent data from the Housing Industry Association, new dwelling approvals declined by 13 per cent during March, which chief economist Warwick Temby says “confirms HIA’s forecasts for a slowing in new residential building projects through 2017”.
“From the record highs in approvals in 2016, the slowing in new projects is only to be expected,” he said.
Similarly, commenting on the decline, ANZ said: “Quite clearly it seems reasonable to conclude we are past the peak in housing approvals.”
However, ANZ noted that there is a “tremendous” backlog of work in the housing sector, with approximately 220,000 dwellings valued at $37 billion currently under construction nationwide.
“While new building approvals are clearly lower than during the 2015-16 peak, this backlog of work will ensure that actual construction activity remains elevated for some time yet,” the bank said.
HIA’s Mr Temby agreed that despite the slowing in new projects, the amount of work currently under construction means that the residential building industry will “continue to operate at high levels well into 2018”.
He also noted that the multi-unit sector of the industry has slowed more quickly than detached homes.
“Multi-unit approvals have fallen 16 per cent when compared with an 8 per cent fall for detached homes in the March quarter 2017 when compared with the same quarter of 2016,” he said.
“Both NSW and Queensland saw approvals fall more than 20 per cent in March mostly from their multi-unit sectors, which had seen strong increases in February.
“Only Tasmania and South Australia recorded increases in approvals in March; up 13 per cent and 0.3 per cent respectively. Falling approvals in the other states and territories included Victoria (-1 per cent), and Western Australia (-2 per cent).”