Media Release
5 March 2009
FUNDS FREEZE BUILDING APPROVALS
Statement by Peter Jones, Chief Economist
Yet another big fall in building approvals
indicates that more policy intervention is required,
according to Master Builders Australia, the peak body for the building and construction industry.
Mr Peter Jones, Chief Economist, said “Choked by the lack of funding, builders are struggling as
project approvals dwindle.”
He said, “The value of approvals for commercial building -
non-residential and other dwellings
combined - has plummeted by an extraordinary 59 per cent over the past 12 months.”
“Another massive fall in approvals of other dwellings in January is clear evidence that the credit
crunch has poll-axed investment in apartments and townhouses.”
“The Government needs to consider policy action that can help unlock funding constraints freezing
out commercial investment projects.”
“The bright spot in the gloom was an increase in house approvals in January, evidence that
aggressive rate cuts by the Reserve Bank and Government stimulus may be beginning to kick in.”
“Whereas finance for owner-occupied housing does not appear to be a barrier, project developers
and investors are really struggling to arrange finance for investment in flats, apartments and
townhouses.”
“Although the forward indicators are positive for house building, it will take time before sharply
lower interest rates and fiscal stimulus measures begin to offset the confidence-sapping effects of
the global financial crisis and previously tight financial conditions.”
“Any further delay in the much needed upturn is not good news given the chronic level of
underbuilding and shortage of stock that are fuelling sharp increases in rents.”
The total number of dwelling units approved, seasonally adjusted, fell by 3.7 per cent to 9,312 units
in January, to be 33.5 per cent lower than the same month in the previous year.
Private sector house approvals rose by 1.1 per cent to 7,042 to be down 22.5 per cent on the same
month last year. The more volatile private sector ‘other dwellings’ (apartments and townhouses),
fell by 15.4 per cent in January to be 54.5 per cent lower than in January 2008.
For further information: Peter Jones, Chief Economist, Mobile 0403 440 838
NEWS 
