The Western Australian housing market has taken another hit today with latest figures showing building approvals falling nearly 14 per cent in September, nearly double that of the national trend.
The Western Australian housing market has taken another hit today with latest figures showing building approvals falling 13 per cent in September, nearly double that of the national trend.
The Australian Bureau of Statistics revealed that building approvals in WA fell to 1619 units, seasonally adjusted, for September, down from the previous month's 1867 units.
In the year to September, building approvals slumped 37 per cent from 2567 units.
Nationally building approvals fell 7.2 per cent to 11,167 units, seasonally adjusted, in September - the lowest level since April 2001.
The market forecast was for building approvals to decrease 1.2 per cent.
Approvals for private sector houses nationally fell 4.7 per cent, while approvals for private sector "other dwellings" (such as flats) declined 15.2 per cent in the month.
In WA, approvals for private sector houses dropped 10.1 per cent to 1281 units while approvals for other dwellings in the private sector dropped from 350 units to 320 units.
The latest ABS data follows statistics released earlier this week that showed Perth recording the biggest fall in house prices over the year to September compared to other capital cities, with a 4.1 per cent fall.
In comparison, national figures recorded a rise of 2.8 per cent over the same period.
The latest ABS figures were taken before the central bank's 1 per cent rate cut in October and 0.75 per cent cut yesterday.
Commonwealth Bank senior economist Michael Workman said September approvals were poor, which will have a negative impact on economic growth data still to come.
"They look very bad particularly because of the fairly large fall in detached dwelling approvals," he said.
"That, of course, has the biggest impact on commencement data later on and GDP figures for the next few quarters."
The central bank cut its key interest rate at its September meeting, lowering the cash by 25 basis points.
Since then the RBA has slashed its overnight cash by a further 175 basis points to 5.25 per cent - with a 100 basis point cut in October and a 75 basis points cut yesterday.
The buildings approvals data was from the first month of rate cuts by the RBA, Mr Workman said.
Future data should now improve due to the federal government's increase in the first home owners grant and the additional rate cuts.
"When the November and December figures start to be printed early next year we will see a recovery in the approvals data," he said.
"We have had large interest rate cuts in a short time.
"The $21,000 grant for first home buyers to build or buy a newly built has technically had a very short impact on the market over the year or two.
Mr Workman said the RBA did not rule out more rate cuts in its accompanying statement yesterday when the central bank cut rates.
"Given the outlook there is more coming," he said.
"We might have a very significant reduction in mortgage rates, down to even mid-sixes."