Multi-units drive ap­provals lower

Whitsunday Times - - REAL ESTATE -

FOL­LOW­ING two con­sec­u­tive months of in­crease, to­tal new dwelling ap­provals de­clined dur­ing May as a re­sult of weak­ness on the multi-unit dwelling side of the market.

Com­pared with April, to­tal new dwelling ap­provals fell by 5.2 per cent in sea­son­ally-ad­justed terms.

This in­volved a de­cline of 10.3% in multi-unit ap­provals, with de­tached house ap­provals inch­ing up by 0.2% over the same pe­riod.

“Multi-unit ap­provals tend to bounce around a lot from one month to the next, but it’s been clear for some time that ac­tiv­ity on this side of the market has peaked,” said HIA se­nior econ­o­mist Shane Gar­rett.

“In­ter­est­ingly, the RBA cut in­ter­est rates dur­ing May and (this) re­sult in­di­cate that this move may have helped con­trib­ute to stead­ier con­di­tions for de­tached house ap­provals,” he said. “The de­cline in ap­provals dur­ing May was quite wide­spread in ge­o­graphic terms, with Vic­to­ria be­ing the only ma­jor state to ex­pe­ri­ence an in­crease dur­ing the month.”

Mr Gar­rett said the fig­ures fit­ted closely with HIA’s view that new home build­ing ac­tiv­ity was in the process of de­clin­ing from last year’s record peak to more modest lev­els as the end of this decade fast ap­proaches.

“The con­trac­tion in ac­tiv­ity is pre­dicted to be con­cen­trated on the multi-unit side, with a more mea­sured re­duc­tion in de­tached house build­ing,” he said.

Dur­ing May 2016, to­tal sea­son­ally ad­justed new home build­ing ap­provals rose in Vic­to­ria (+3.1%) with a slight in­crease also oc­cur­ring in Tas­ma­nia (+0.1%).

New dwelling ap­provals saw the largest re­duc­tions in Western Aus­tralia (-20%), Queens­land (-17.6%) and South Aus­tralia (-13%) with a fall also oc­cur­ring in New South Wales (-6.9%).

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