Housing approvals down by nearly 20 per cent

The new numbers reveal that 16,448 dwelling units were approved in May, marking a month-on-month fall of 5.6 per cent.

In trend terms, the number of dwellings approved in the year to May 2017 fell by 18.1 per cent, with a drop of 1.9 per cent between April and May 2017.

The figures show that there was a substantial drop in the number of approvals for dwellings excluding houses (such as apartments) with ABS reporting a 31.3 per cent drop in this area for the year to May 2017 (in seasonally adjusted terms) or 29 per cent in trend terms.

Tim Reardon, principal economist for the Housing Industry Association (HIA) said the slowdown in housing approvals had been prevalent for about six months.

“This downward trend confirms our forecasts for a slowing in new residential building projects through 2017,” he said, highlighting the sharper slow-down in the multi-unit sector.

“During the three months to May 2017, multi-unit approvals fell by 27.8 per cent when compared with the same period in 2016.”

Adding that the residential building industry will continue to be strong “well into” 2018, he said the softening is in “stark contrast” to the needs of first home buyers and argued that an increase in housing supply should be promoted.

In trend terms, month-on-month falls in dwelling approvals were experienced by the ACT (-8.2 per cent), Victoria (-3.9 per cent), Western Australia (-3.7 per cent) and NSW (-2.6 per cent). Queensland met with an increase of 2.2 per cent, along with the Northern Territory (2.1 per cent), South Australia (1.6 per cent) and Tasmania (1.5 per cent).

On a national level, the value of new residential buildings approved fell by 1.5 per cent in May, marking three months of a downward trend, according to ABS estimate.

[Related: Fall in home ownership not surprising, says CoreLogic]