Building approvals in Western Australia have nearly halved over the past year as the latest January figures solidifies the property slump in the state.
Building approvals in Western Australia have nearly halved over the past year as the latest January figures solidifies the property slump in the state.
According to latest figures from the Australian Bureau of Statistics, building approvals in January plummeted 48 per cent from the previous corresponding period's 2586 units to a seasonally adjusted 1349.
Compared to December's figures, approvals fell 4.2 per cent from 1408.
Nationally, approvals fell 3.7 per cent to 9,312 units in January, seasonally adjusted, from an upwardly revised 9,666 units in December.
In the year to January, building approvals fell 33.5 per cent.
The market forecast was for building approvals to have recorded a rise of 1.6 per cent in January.
That glimmer of hope came from the number of private sector housing approvals which rose 1.1 per cent in January.
It was the first improvement in that category since April 2008, which RBC Capital Markets senior economist Su-Lin Ong said was a tentative sign the large interest rate cuts since September last year were starting to flow through.
"While the housing sector remains weak, there are some tentative signs of policy traction as multi-decade lows in mortgage rates lend support," Ms Ong said.
"The details were less dire."
However, the data indicated property investors remained firmly on the sidelines.
The number of approvals in the "other dwellings" category, which includes flats, townhouses and other multi-unit homes, declined for the sixth month in a row after backpedalling 15.4 per cent in January.
ICAP senior economist Adam Carr said the caution shown by property developers reflected difficulties securing credit.
"It was really only through January that developers were seeing an easing in credit tightening," Mr Carr said.
"Now it makes sense to me that developers wouldn't then run out and get an approval. There is too much uncertainty."
In terms of the overall picture, total dwelling approvals fell by 3.7 per cent in January, seasonally adjusted, extending a slide that began in July and has continued unabated for seven months.
The result was well below the market forecast of a 1.6 per cent rebound.
CommSec chief economist Craig James said it would be a couple more months before the big interest rate cuts and the boost to the first home owner grant came through in the data.
"At some point in time we are going to see an almighty rise because we just can't continue to under build here in Australia," Mr James said.
Housing Industry Association chief economist Harley Dale said it would take more than the revival in the first home buyer market to generate a recovery in residential construction.
"A further decline in building approvals in January is a very weak update on the short-term prospects for new home building activity," Mr Dale said in a statement.
