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UPDATED: ABS figures for January show huge falls in residential and non-residential construction.
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House building approvals slump to decade low
02 March 2023
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Dwelling approvals slumped 27.6 per cent in January led by the fifth consecutive fall in private sector house construction to the lowest result since 2012, the ABS says.
The decline was even more marked for “private sector dwellings excluding houses” – semis, terraces, townhouses and apartments – which unwound a rise in December to fall almost 42 per cent in January.
ABS head of construction statistics Daniel Rossi said: "Approvals for private sector houses fell by 13.8 per cent, the fifth consecutive drop, to be the lowest result recorded since June 2012.
“The more volatile private sector dwellings excluding houses series fell 40.8 per cent, following a 41.9 per cent rise in December.”
The seasonally adjusted data showed the declines were most marked in the largest states, with total dwelling approvals plummeting 49 per cent in NSW and 39 per cent in Victoria.
Total dwelling approvals also fell in other states, with Tasmania down 32 per cent), Western Australia down 8 per cent) and South Australia down nearly 7 per cent).
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Only Queensland bucked the trend, with an increase of 26 per cent driven by apartment developments approved in January.
The value of total building approvals fell 18.6 per cent, following a 1.0 per cent increase in December.
For residential buildings value declined 14 per cent, comprising a 15 per cent decrease in new residential building and a 4 per cent fall in alterations and additions.
For non-residential building, the value decline was 26 per cent, following a 1.6 per cent fall in December.
Master Builders Australia CEO Denita Wawn said without government action, there would be worse news to come.
“Despite the intention from governments and industry to reach a target of 1 million homes under the Housing Accord, today’s data highlights that more needs to be done to tackle supply barriers and to speed up the delivery of new homes and attract investment,” said Ms Wawn.
“Without sensible fiscal levers being pulled, we are seeing the negative consequences of rising interest rates playing out.
“Insufficient supply of titled residential land, high developer charges and inflexible planning laws are preventing new home building projects from getting off the starting blocks.
“Builders are seeing evidence of declining sales, and we anticipate this slowdown will continue over the course of 2023.”
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