Building approvals crash in WA

Building approvals have fallen dramatically in Western Australia, with the number of new dwellings sanctioned down 37 per cent in July. 

The number of dwellings approved in the month was 1,204, seasonally adjusted, the lowest since the depths of the pandemic in July 2020.

The market was then pumped up by stimulus packages announced in autumn of that year, which Premier Mark McGowan later said had helped avoid a “valley of death” in the construction industry.

Approvals peaked in February 2021 at more than 2,900 in the month.

The latest data comes after the construction industry was hit by solvency issues, skills shortages and rising costs, and follows a series of tightening moves by the Reserve Bank of Australia.

Commsec senior economist Ryan Felsman said apartment approvals had been at a 10.5-year low nationally.

“The number of dwelling approvals [Australia-wide] fell by 17.2 per cent in July to 13,595 units,” he said. 

“It was the second biggest monthly percentage decline since December 2017. 

“Approvals are down 25.9 per cent on a year ago.”

That was driven by a big fall in apartment approvals, down 43.5 per cent, he said.

In an economics note, St George Bank said high rise approvals had fallen off a cliff.

“Today’s outcome confirms that higher interest rates are reducing demand for the construction of new dwellings,” the bank said.

“At the same time, developers are on the sidelines given elevated building material costs and staffing costs, which in some instances has led high-profile developers into liquidation.”