June 2011 building approvals fall for third consecutive month

THE total number of dwellings approved fell 3.5 per cent in June 2011, in seasonally adjusted terms, following a revised fall of 6.3 per cent in May, according to the latest data released by the Australian Bureau of Statistics.

Dwelling approvals decreased for the month of June in Queensland (-18.6 per cent), South Australia (-12.2 per cent), Tasmania (-8.1 per cent) and Western Australia (-3.0 per cent) in seasonally adjusted terms.

Victoria (+6.9 per cent) and New South Wales (+3.2 per cent) bucked the trend, recording increases for the total number of dwellings approved, in seasonally adjusted terms.

In seasonally adjusted terms, approvals for private sector houses fell 3.2 per cent in June with falls in Victoria (-8.1 per cent), New South Wales (-4.8 per cent), Queensland (-4.5 per cent) and South Australia (-3.4 per cent) while there was a rise in Western Australia (+11.3 per cent).

The value of total building approved fell 2.2 per cent in June in seasonally adjusted terms. The value of total residential building fell by 4.1 per cent while non-residential building rose by 1.3 per cent after a 4.4 per cent fall in May.

The Housing Industry Association (HIA) said the June 2011 result was a two year low for building approvals.

"Evidence continues to mount of an accelerated deterioration in new home building conditions," said HIA Chief Economist, Dr Harley Dale.

"That situation highlights the appropriateness of continued steady interest rates, the need for stimulus to arrest the new housing decline, and the importance of reform at the October Tax Forum to remove the excessive taxation levied on new residential construction," Dr Dale said.

"The profile for building approvals is unequivocally weak, implying housing starts running at an annualised level of around 146,000, at best," noted Harley Dale.

"Underlying demographic demand is running at 174,000 dwellings per annum so the maths is rather poor, isn't it?"

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