Building approvals record double digit falls

Melbourne may need more than an endangered frog to stir up pent up demand if last months’ building approvals are anything to go by.

Home approvals fell 10.7 percent in the month of October contributing to a 29.8 percent fall for the year. Apartments and units have lead the falls, down 44.6 percent for the year while approvals to build houses is down 15.4 percent.

Queensland was the hardest hit with approvals to build new homes down 19.5%. Melbourne followed by just a whisker, recording a 18 percent fall.

The large falls in October follows similarly large falls September and has some analysts questioning the data. Brian Redican, senior economist at Macquarie Group said “Maybe some councils were late in getting their approvals through, but I suspect these figures contain more noise than signal.” For example, NSW recorded a 43% rise in approvals for the month of August, only to be followed by a 33% fall in September and a steady result in October. On the other hand, Victoria and Queensland falls appears to be accelerating, with Victoria recording falls of 14 percent for the month of September followed by 18 percent in October. Queensland similarly reported falls of 13.6 percent in September followed by 19.5 percent in October.

» 8731.0 – Building Approvals, Australia, October 2011 – Australian Bureau of Statistics, 1st December 2011.
» Building approvals continue to slump – The ABC, 1st December 2011.