Media Release
2 July 2008
BIG FALL IN DWELLING APPROVALS
Statement by Peter Jones, Chief Economist
Dwelling approvals suffered a big fall in April, reversing last months surprise increase,
according to Master Builders Australia, the peak body for the building and construction
industry.
Mr Peter Jones, Chief Economist, said: The recent spike in fuel prices coupled with higher
interest rates is affecting buyer behaviour and suppressing activity in the residential building
market
Housing will continue to suffer fallout as the lagged effect of
high interest rates and
declining consumer confidence flow through, he said.
Most of the major states are now facing negative trends in approvals of
houses, units,
alterations and additions as the industry suffers collateral damage in the fight against inflation.
Even if recent signals from the Reserve Bank that interest rates are on hold prove accurate, it
will take time for consumer sentiment to turnaround and underpin the strong and sustained
recovery needed to alleviate what has become a chronic shortage of housing, Mr Jones said.
The total number of dwelling units approved, seasonally adjusted, fell by 6.5 per cent to
12,438 units in May, to be 0.2 per cent higher than the same month in the previous year.
Private sector house approvals
fell by 1.2 per cent to 8,729, to be up 1.7 per cent on the same
month last year.
The more volatile private sector other dwellings (apartments and townhouses), fell sharply
by 18.2 per cent in May, to be 4.2 per cent lower than in May 2007.
For further information contact:
Peter Jones, Chief Economist Work 02 6202 8888, Mobile 0403 440 838