The total number of new dwelling approvals declined in May, following two consecutive months of increase, the Australian Bureau of Statistics has revealed.
Total new dwelling approvals fell by 5.2 per cent throughout the month, including a 10.3 per cent decline in multi-unit approvals.
Detached house approvals saw a slight increase of 0.2 per cent over the same period.
“Multi-unit approvals tend to bounce around a lot from one month to the next, but it’s been clear for some time that activity on this side of the market has peaked,” HIA senior economist Shane Garrett said.
“Interestingly, the RBA cut interest rates during May and [the] result indicates that this move may have helped contribute to steadier conditions for detached house approvals.”
Mr Garrett said the figures fell in line with the HIA’s forecast that new home building activity was in the process of declining from last year’s record peak to more modest levels.
“The contraction activity is predicted to be concentrated on the multi-unit side, with a more measured reduction in detached house building,” he said.
The sentiment was echoed by the Property Council’s chief of policy and housing, Glenn Byres, who said the data was a warning sign for governments.
“We have a fall of 9.1 per cent in annual terms, with a decrease of 11.3 per cent in seasonal terms for apartments over the month, yet three state governments in New South Wales, Queensland and Victoria are rushing ahead with taxes on investment that will hurt supply and housing affordability,” Mr Byres said.
“The official data shows Victoria has fallen 12.8 per cent since it announced its new tax, and there are softening conditions in NSW and Victoria.
“The new anti-investment taxes represent bad taxes at a bad time and all three states should be instead looking to real policies to improve housing affordability.”
[Related: New home sales facing downturn]