Australia

Dwelling approvals fall 4.4 per cent in December 2012

THE number of dwellings approved fell 4.4 per cent in December 2012, in seasonally adjusted terms, following an upwardly revised increase of 3.4 per cent in November, according to the latest data released last week by the Australian Bureau of Statistics (ABS).

Dwelling approvals decreased in December in Tasmania (-21.8 per cent), Victoria (-12.3 per cent) and New South Wales (-1.3 per cent) but increased Queensland (7.9 per cent), South Australia (1.7 per cent) and Western Australia (1.3 per cent), in seasonally adjusted terms.

In seasonally adjusted terms, approvals for private sector houses fell 3.3 per cent in December. Private sector house approvals fell in Victoria (-12.7 per cent) and Western Australia (-2.2 per cent), but rose in South Australia (9.0 per cent), Queensland (5.2 per cent) and New South Wales (1.2 per cent).

The value of total building approved fell 1.9 per cent in December, in seasonally adjusted terms, and has fallen for three months. The value of residential building fell 3.0 per cent while non-residential building rose 0.1 per cent.

The Housing Industry Association (HIA) said what had been a modest recovery in ABS building approvals lost momentum in late 2012, with Chief Economist, Harley Dale, saying the result provides little additional insight into prospective new home building activity in 2013.

"It remains the case that any signs of improvement in building approvals remain patchy in terms of both geographic location and type of dwelling," Mr Dale said.

"It is encouraging to see that despite the monthly dip in December, approvals for other dwellings increased by 12.3 per cent in the December 2012 quarter," he said, but added that it was disappointing that detached house approvals continued to underperform in late 2012, falling by 1.6 per cent in the December quarter.

"Interest rates may be low and in need of heading lower, but the new home building sector still faces tight credit conditions together with excessive and inefficient levels of taxation and regulation," Mr Dale said.

"From the Federal level down, clear strategies and policies are required to address these avoidable cost imposts on a sector that needs to be a key driver of Australia's economic growth."

Master Builders Australia said the December building approvals figures confirm the building and construction industry is still at the very early stage of a recovery.

Master Builders Australia's Chief Executive Officer, Wilhelm Harnisch, said the seasonally adjusted total fall in approvals was largely due to a 12.7 per cent fall in Victoria.

"In trend terms, growth in the number of building approvals remains marginally positive," Mr Harnisch said, adding that new home buyers are in a unique position to capitalise on the current soft conditions, combined with the reduction of mortgage repayments and many state based incentives.

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