The release of the latest building approvals and lending figures by the Australian Bureau of Statistics (ABS) today are showing signs of ongoing decline in economic activity said Master Builders CEO Denita Wawn.
“The number of loans fell back again during September 2022 both to owner occupiers and housing investors. This coincides with weaker building approvals which dropped by 5.8 per cent compared with August.
“Australia’s building and construction industry is one of the most sensitive parts of the economy to interest rates rises and the figures for September underline the delicate state of the new home building market,” Ms Wawn said.
Detached house building approvals saw a much sharper drop of 7.8 per cent compared with medium/high density dwellings. In previous months, there had been signs that new detached house building approvals had steadied out.
Despite the big interest rate increases, average loan sizes are still bigger than a year ago for most categories. Loans for major home renovations works are still well higher for both owner occupiers and housing investors at +13.6 per cent and +12.4 per cent respectively.
Interestingly, there was a big gain in approvals for apartments in high-rise buildings of nine plus storeys. The strengthening picture for high-rise may be related to the anticipated recovery of inward migration to major cities.
“The building and construction industry continues to be impacted by product cost pressures and a shortage of tradespeople.
“Any significant government policy changes, like the Government’s proposed industrial relations legislation, needs to be carefully considered against this backdrop,” Ms Wawn said.
