HIA reports low housing affordability in residential sector for July
Building approvals went nowhere at the start of the new financial year. Figures released show that dwelling approvals only managed a 0.4% increase in July to a level of 12,980.
Approvals for detached houses increased by 1% in July to a level of 8,852, still 1.4% low than in July last year. Apartment approvals were down by 0.7% to 4,128, a sharp 18.3% off the level of a year earlier.
Australia’s peak building industry body, Housing Industry Association, said that no clear upward trend has emerged in building approvals through 2007 to date.
According to Housing Industry Association, the building approvals peaked back in October
2003 and nearly four years there was no sign of a recovery for new home building.
For leading indicators such as building approvals to still be struggling so long after a peak in the cycle provides compelling evidence of the negative impact record low housing affordability is having on the residential sector.
The first seven months of 2007 have been weak for approvals than last year and that is before the negative impact of the August rate rise took hold.
Without a concerted effort to alleviate the affordability constraint 2007/08 will mark yet another weak year for new home building, placing further pressure on rental markets which are already tight.
The monthly trend in building approvals in July fell by 4.5% in Tasmania, 2.3% in New South Wales, and 1% in the Northern Territory. Approvals were effectively flat in South Australia (+0.2%), Queensland (+0.3%), and Western Australia (+0.3%). Building approvals were up by 2.6% in Victoria and 10.9% in the Australian Capital Territory.
4-Sep-2007