Building approvals data for September confirm the industry is at a low ebb, both in dwelling construction and in the non-dwelling sector.
Building approvals data for September confirm the industry is at a low ebb, both in dwelling construction and in the non-dwelling sector.
The number of residential building approvals fell by 6.6 per cent, seasonally adjusted, in September to a 15-month low.
In Western Australia, overall building approvals fell 2.0 per cent in September.
The number of detached house approvals was down by 9,6 per cent over the three months to September and were down 12.4 per cent on the same period a year ago.
"It's disappointing to see data which suggests that new home building in Western Australia is heading south at a time when the broader Western Australian economy is expected to benefit strongly from mining-driven economic growth," said Housing Industry Association executive director, Western Australia, John Dastlik.
The value of residential approvals, including additions and alterations, was down by 4.5 per cent while non-dwelling building approvals fell by 0.7 per cent by value.
In total, the value of approvals was down by 3.2 per cent, hitting a 15-month low.
Through the September quarter, the value of approvals was 16 per cent lower than the average for 2009.
As a percentage of nominal gross domestic product, the value of building approvals (pending the release of September quarter GDP data next month) is now almost certainly significantly below levels seen in the recessions of the early 1980s and early 1990s.
These figures do not tell the full story of the construction sector, because they do not include so-called "engineering construction", which includes structures ranging from pipelines and ports to mines and bridges.
Engineering construction is being supported by the mining boom and will be boosted much more over the coming few years.
Even so, the building approvals figures do highlight the juggling act the Reserve Bank of Australia is currently attempting - setting a one-size-fits-all interest rate for an economy with a wide divergence of conditions between industries and regions.
Ultimately, it will come down the the average, a story that will be told by the GDP figures on December 1.
There will be plenty of time for the RBA's board to consider the data ahead of its next monetary policy meeting on December 7.
CommSec senior economist Craig James said higher interest rates were in part responsible for the slump.
"But governments, local councils and financial institutions should also share the blame," he said.
"Clearly there needs to be a meeting of minds at a high level to free up the approval process, reduce the cost for developers and re-assess the financing needs and requirements imposed on investors, home buyers and developers," said Mr James.
HIA senior economist Andrew Harvey said the weak housing outlook would be compounded by the interest rate rise.
"Due to the additional independent 20 basis point increased by the Commonwealth Bank, (this) will act like a sledgehammer on confidence and economic activity in the non-resource sector," said Mr Harvey.
Seasonally adjusted building approvals in September 2010 were weighed down heavily by a 24.9 per cent drop in South Australia.
There were also declines in Victoria (down by 10.0 per cent), Queensland (down by 2.3 per cent) and NSW (down by 1.5 per cent).
In trend terms approvals fell by 10.4 per cent in the Australian Capital Territory and by 2.1 per cent in the Northern Territory.
Tasmanian approvals rose by 1.0 per cent in seasonally adjusted terms.
