Building approvals fell in WA in March quarter

Building approvals fell in the March quarter compared with 12 months earlier but in the month of March new detached house sales increased.

COMPARED with a year earlier, building approvals during the March quarter fell by 18.2 per cent in Western Australia.

Western Australia and the Northern Territory – where approvals fell by 23.4 per cent – are not benefiting from the population and economic growth, which is happening in the eastern states.

During the same period building approvals grew by 20 per cent in  Victoria, 15.2 per cent in Queensland.

There was a more moderate growth of 9 per cent in Tasmania and 8.1 per cent in South Australia.

On Thursday, May 3 Housing Industry Association (HIA) senior economist Shane Garrett said the areas with the strongest population growth were helping to sustain new home building approvals.

“Population growth is particularly strong in Victoria and Queensland because of their ability to generate lots of new jobs at the moment,’’ he said.

Earlier last week HIA WA executive director John Gelavis said the state had bucked the national trend by recording the strongest increase in new detached house sales during March with an increase of 26.2 per cent occurring during the month while new homes sales nationally declined by 2.2 per cent.

On Monday, April 30 Mr Gelavis said the HIA new home sales report – a monthly survey of the largest volume home builders in the five largest states – provided an early indication of trends in the residential building industry.

“This follows a 9.9 per cent fall during February in WA,’’ he said. “There is some evidence that detached house sales in WA might have finally bottomed out.

“During the March 2018 quarter, detached house sales were up by 1.6 per cent compared with the final quarter of 2017.

“According to ABS data, approvals for new detached houses fell by 11.3 per cent during February 2018 following a 6.1 per cent reduction during January.

“During the February 2018 ‘quarter’ the number of approvals was up by 4.9 per cent on the previous quarter.

“Perth is now Australia’s most affordable capital city for home purchase although the local labour market remains soft.

“Sales results over the next few months will provide a good indication of whether the corner has been turned in WA”.

“We are seeing consumers take advantage of the current market conditions of low interest rates, increased competition, faster build times and state government stimulus for first home buyers such as the $10,000 first home owner grants and stamp duty exemptions, which plays an important part in the recovery.’’