In almost two years, new dwelling approvals have fallen to their lowest level by 9.4 percent for August on seasonally adjusted terms, taking the annual fall to 13.6 per cent. Drooping by more than one-third were the building approvals for high-rise apartments. The big decline of 18.4 per cent from July to 6,813 came in the attached dwellings – townhouses, units, and semi-detached homes, while new standalone houses approvals slipped to 9,664 just 1.7 percent month on month. Suffering a 38 percent decline to 3,037, the major chunk was in the high-rise apartments, however, which is the lowest number since March last year.
The second month of decline in total dwelling approvals is August, from June's recent peak of 231,665. As banks reduce their exposure to both local and foreign investors, the lack of funding available to developers, particularly of apartments, is squeezing their ability to progress with new projects. Developers are resisting starting new ones, based on projects approved two or three years ago. Apartment construction fell at its fastest pace, in almost six years. If funding is more difficult one is going to see fewer building approvals which is been reflected in the market.
UBS economist George Tharenou said, “Across Australia's eastern seaboard, the worse than expected numbers showed that new housing investment was beginning to respond to falling dwelling prices”. New housing activity in the first half of 2018 had been tough to the credit tightening and the drag from falling house prices. However, 'new' housing may also be starting to roll over considering the slump in the last couple of months to a near 2-year low. The hardest suffering states were Victoria dragged by a 35 percent drop in attached dwelling approvals and where total monthly approvals fell 12 percent.
An 11.2 percent fall in townhouse, unit and semi-detached approvals resulted into Queensland's monthly 8.4 percent decline. In New South Wales with attached dwellings slipping 1.9 percent and houses down 3.7 percent, total monthly approvals dipped just 2.7 percent. While after two months of decline, approvals in SA picked up. As approvals of townhouse, unit and semi-detached homes jumped 88 percent from 239 to 450, with a 14.7 percent increase in August, WA bounced back after July's 12 per cent decline.
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