Approved dwellings fall by almost 6%: ABS

The Australian Bureau of Statistics (ABS) data has revealed a 5.8 per cent drop in the total number of approved dwellings, at 16,455 approvals, following a 23.1 per cent increase in August.

In annual terms, the total number of dwellings approved fell by 13 per cent when compared to the same period in 2021.

Total dwelling approvals fell all across Australia, with Victoria being the only state to record an increase, rising by 3.4 per cent.

South Australia recorded the largest drop at 19.7 per cent, followed by Tasmania (10.8 per cent), Western Australia (9.3 per cent), NSW (8.8 per cent) and Queensland at 6.2 per cent.

Private sector housing approvals saw drops in all states, with Western Australia falling by 11.4 per cent, Queensland at 8.6 per cent, NSW at 7.9 per cent, Victoria at 4.7 per cent and South Australia at 4.3 per cent, in September.

Total building approval values fell by 6.9 per cent in September after a 19.5 per cent increase in August. Residential building approval values declined 12.7 per cent, including a 14 per cent drop in new residential building along with a 2.9 decline in alterations and additions.

Conversely, the value of non-residential building approvals rose by 3.7 per cent following a previous rise of 11.5 per cent in August.

Director of construction statistics at the ABS, Daniel Rossi, said: “The fall in approvals was driven by private sector houses, which declined 7.8 per cent. Approvals for private sector dwellings excluding houses fell 1.8 per cent.”

Westpac associate, Ryan Wells, stated that the September report suggests that dwelling approvals are beginning to “more broadly weaken, reflecting the harsh set of [circumstances] facing the housing market”.

Mr Wells attributes issues such as aggressive rate rises, increasing building costs, uncertainties around timing, and widespread supply issues affecting both materials and labour to the weakening housing market.

Owner-occupier mortgages also fell in September

In a month’s time, owner-occupier housing loans fell by 9.3 per cent to $16.8 billion in September, according to the ABS.

Along with this, ABS data also revealed that the value of new loan commitments for housing declined by 8.2 per cent to $25.1 billion following a previous fall of 3.4 per cent in August 2022.

HIA senior economist Nick Ward stated the Reserve Bank of Australia’s (RBA) tightening is “weighing heavily on demand for housing and the full impact will not emerge until the second half of 2023”.

“This slowing in housing finance data is consistent with other leading indications, such as HIA’s New Home Sales Survey, which have fallen more than 15 per cent in the September quarter,” Mr Ward added.

[RELATED: Owner-occupier loans drop 9.3% in a month: ABS]