It was a challenging 2019 for building approvals
According to recently-released Australian Bureau of Statistics monthly building approvals data for all states and territories, building approvals in the 2019 calendar were 18.5% lower compared to the previous year which has been a significant drag on the national economy.
“The start of 2019 was tough for the residential building industry with the credit squeeze, falling house prices and uncertainty surrounding the federal election putting a dampener on confidence,” HIA economist Angela Lillicrap says.
“The market did improve in the final months of 2019, suggesting that the building industry will not continue to constrain economic growth in 2020. New home building has stabilised at relatively strong levels.
“Detached house approvals have a three-month annualised level of 101,240 approvals which is a very robust level and similar to building volumes in 2018.
“Multi-unit approvals have been leading the declines and are 25.0 per cent lower than they were in 2018.
“Continued growth in house prices will assist in bringing investors back to the market as well as support an increase in activity across the broader economy. We are unlikely to see the same boom of investors as experienced in the previous cycle due to restrictions on foreign investors.
“Constraints on access to credit will continue to be the biggest impediment to future growth in building approvals,” Angela concludes.
In seasonally adjusted terms, building approvals for the December 2019 quarter increased in Victoria (+26.7%), South Australia (+6.9%) and New South Wales (+1.2%), while declining in Tasmania (-0.8%), Queensland (-5.1%) and Western Australia (-6.8%).
In trend terms, the Australian Capital Territory declined by 0.5% while the Northern Territory increased by 1.6 %.