Property approvals have fallen for the third consecutive month, according to the Australian Bureau of Statistics.
The director of construction statistics at the Australian Bureau of Statistics (ABS), Daniel Rossi, attributed the 1.7 per cent fall in the number of dwelling approvals in December to a decline in private dwellings.
“Dwelling approvals have weakened in December, driven by a large decline in private dwellings excluding houses,” Mr Rossi said.
“Approvals for private sector houses have remained stable, with just under 10,000 houses approved in December 2017.”
Dwelling approvals declined across the country, with the sharpest reduction experienced in the Australian Capital Territory (35.0 per cent), followed by the Northern Territory (12.9 per cent), New South Wales (5.6 per cent), South Australia (2.4 per cent), Western Australia (1.3 per cent) and Queensland (0.8 per cent).
Conversely, dwelling approvals rose in Tasmania and Victoria by 3.1 per cent and 2.5 per cent, respectively.
Further, dwelling approvals plunged by 20.0 per cent in seasonally adjusted terms, which, according to the ABS, was also driven by a fall of 39.2 per cent in private dwellings (excluding houses).
Private housing approvals increased by 1.0 per cent in the same period.
Moreover, the overall value of building approved in December declined for the first time in 11 months, dropping by 0.3 per cent.
The value of residential building also fell, dropping by 0.2 per cent, while the total value of non-residential buildings approved dropped by 0.4 per cent in the last month of the year.
Further, data released earlier this week revealed that in January, dwelling values fell by 0.3 per cent on a national level, with Sydney prices taking a 0.9 per cent hit, according to CoreLogic’s Hedonic Home Value Index.
CoreLogic’s head of research, Tim Lawless, partly attributed the January results to “seasonal” factors, but noted that, historically, they have little impact on the overall trend.
“Housing market activity is generally more sedate from late December through to late January, a factor which can contribute towards higher volatility in housing market measurements due to the lower number of observations,” Mr Lawless said.
“Our experience has been that this seasonality doesn’t exert much influence over the trend in hedonic valuations.”
Mr Lawless added that the latest figures signal a continuation of a softening trend, most evident in Sydney and Melbourne.
“While January may deliver additional noise in the indices’ results, the negative monthly result lines up with recent months, which showed a softening trend, particularly in Sydney and, to a lesser extent, Melbourne.
The head researcher concluded: “In the absence of a catalyst to reinvigorate the market, such as lower mortgage rates or a loosening in credit policies, we expect to see a continuation of softening conditions across these markets.”