Building approvals in Western Australia have slumped 30 per cent in November to levels not last seen in nearly eight years, as a lack of credit and economic uncertainty stopped investors from buying property, economists say.
Building approvals in Western Australia have slumped 30 per cent in November to levels not last seen in nearly eight years, as a lack of credit and economic uncertainty stopped investors from buying property, economists say.
In latest figures from the Australian Bureau of Statistics, WA led the nation in the drop in residential dwelling approvals, falling 29.55 per cent to 1192 units, seasonally adjusted, from 1692 units in October.
Compared to the same period last year, building approvals in the state plummeted 43.8 per cent from 2121 units.
The November figure is the lowest building approval rate in WA in nearly nine years, when 1137 units, seasonally adjusted, were approved in March 2001.
The figures follow an 8 per cent rise in new home sales in November, as found from a survey of the largest 100 residential builders in Australia by the Housing Industry Association.
HIA today cited the lack of credit and overall economic uncertainty as the primary causes for a "dismal" result.
Nationally, building approvals dropped 12.8 per cent while the multi-unit sector was worst affected, with approvals plummeting 20 per cent. Detached housing approvals fell 10 per cent.
HIA chief executive Chris Lamont said the national dwelling approvals had now fallen for a fifth straight month and are now 35 per cent lower than the previous corresponding period.
"Activity in the second half of 2008 reflected the general slowing of the economy and difficulties faced in securing finance for new construction projects," Mr Lamont said.
"Added to this was very poor consumer and business confidence."
Approvals also fell in Queensland, down 15.9 per cent, Victoria dropped 10.2 per cent, Tasmania fell 4.7 per cent and South Australia dipped 1.4 per cent.
New South Wales' building approvals rose 2.3 per cent while the Northern Territory jumped 13.9 per cent.
HIA today repeated its calls for further stimulus to maintain employment and activity in the sector, in addition to the $10.4 billion package unveiled by the federal government last year.
RBC Capital Market senior economist Su-Lin Ong said the private sector component was still feeling the effects of 12-year high interest rates before the central bank began their aggressive easing in September.
The Reserve Bank of Australia slashed interest rates from 7.25 per cent to 4.25 per cent over a four month period late last year.
"Building approvals look like they are down to their lowest level since early 2001, during that period of slowdown," she said.
"No large surprises given the key lead, housing finance, has been down for about eight months.
"There is nothing to suggest a bottoming in housing.
All the measures from the central bank and the federal government to give a boost to the housing market would take time to filter through, Ms Ong said.
In mid-October, the federal government doubled the first homeowners grant to $14,000 for an existing home and up to $21,000 for a new dwelling.
"It is clearly a bit too soon for rate cuts to be working their magic," she said.
