09/10/2007 - 22:00

Approvals falling

09/10/2007 - 22:00

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Approvals falling

The sharp decline in housing approvals in Western Australia during the past 18 months has raised concerns about the health of the state’s rental market and worsening housing affordability.

Despite tight rental markets, overall building approvals remained flat in August, with approvals for detached houses in WA falling 8.7 per cent to 1,338 and apartment approvals increasing 55.2 per cent to 388, according to Australian Bureau of Statistics figures released last week.

Housing Industry Association executive director WA, Sheryl Chaffer, said any downturn in the availability of residential dwellings was likely to have consequences for the tight rental market and housing affordability.

The HIA expects detached housing approvals will continue their downward spiral for the rest of 2007.

“Housing approvals overall will either stabilise or drop in the coming months. Detached housing is dropping and this will likely continue through to the end of the year,” Ms Chaffer said.

“People are hesitating buying new homes.”

Ms Chaffer said the strong rise in apartment approvals during August was not related to the fall in detached housing approvals, as the figures were affected by large multi-unit apartment projects coming on stream at one time.

Although a clear trend in apartment approvals could not be determined, Ms Chaffer said there was probably some recovery ahead for the sector as the percentage of apartments within total dwellings had dropped.

The monthly trend in building approvals in August fell by 3.4 per cent in Tasmania, 2 per cent in WA, 0.9 per cent in New South Wales, and 0.8 per cent in the Australian Capital Territory.

Approvals were up by 0.3 per cent in South Australia, 0.5 per cent in Queensland, 0.9 per cent in the Northern Territory, and 2.5 per cent in Victoria.

Meanwhile, the Urban Development Institute of WA expects an increase in the number of land titles in the coming months, with more land under construction in the June quarter of 2007 compared with the two previous quarters.

The UDIA’s June quarter statistics showed a significant recovery in the sale of land following supply constraints in 2006.

UDIA chief executive Debra Goostrey said more affordable land, combined with pent-up demand, would lead to increasing market activity in the next six to 12 months.

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