THE number of dwellings approved fell 7.8 per cent in February 2012, in seasonally adjusted terms, following a revised rise of 1.1 per cent in January, according to the latest figures from the Australian Bureau of Statistics (ABS)
Dwelling approvals decreased for the month of February in New South Wales (-41.2 per cent) but rose in Queensland (13.0 per cent), South Australia (10.1 per cent), Tasmania (10.0 per cent), Western Australia (5.7 per cent) and Victoria (1.1 per cent) in seasonally adjusted terms.
In seasonally adjusted terms, approvals for private sector houses fell 3.4 per cent in February with falls in South Australia (-11.9 per cent), Western Australia (-8.4 per cent), New South Wales (-2.1 per cent), Queensland (-1.6 per cent) and Victoria (-0.6 per cent).
The value of total building approved decreased 32.1 per cent in February in seasonally adjusted terms, following a revised increase of 51.6 per cent in January. The value of residential building was flat while non-residential building fell 53.7 per cent.
According to the Housing Industry Association (HIA), building approvals fell to their lowest level in nearly three years in February 2012, highlighting the urgent need for lower interest rates and government action.
HIA Chief Economist, Dr Harley Dale, said the building approvals outcome for February is "woeful", even when allowing for New South Wales virtually driving the entire fall.
"It is difficult to be positive about the short term prospects for new housing when a 7.8 per cent decline in building approvals in February 2012 takes them to their lowest level since March 2009," said Dr Dale, adding that the level of approvals over the three months to February implies annual housing starts hitting a level lower than the GFC trough of 2008/09.
Dr Dale said current policy settings are failing the housing industry, with the nation's interest rate settings "clearly too high". He also said there "needs to be immediate federal and state government focus on policy reform to boost flagging levels of new housing supply."
Chief Economist of Master Builders Australia, Peter Jones, said the current level of dwelling approvals is running at 130,000 (annualised), a number he said is "way below what's needed to even provide for population growth let alone to begin to eat into the housing shortage estimated by the Government's own Housing Supply Council at more than 200,000 dwellings."
The Reserve Bank of Australia this month decided to keep the official cash rate unchanged, disappointing both the HIA and Master Builders Australia.