Approvals data points to a property turnaround on the cards
It’s being billed as the most significant thing to happen to the property market since the GST brought on a correction — and it could herald the turnaround we’ve been waiting for.
Latest data from the Australian Bureau of Statistics has seen building approvals fall a massive 19.5 per cent in the 2018/2019 year compared to 2017/2018.
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Housing Industry Association chief economist Tim Reardon called it “the most significant market correction since the introduction of the GST”.
“In 2017/18 there were more than 232,000 buildings approved in what was a continuation of a sustained boom in home building. The sharp contraction in 2018/19 was exacerbated as credit conditions tightened and economic growth slowed,” he said.
“The downturn in detached house approvals was a relatively modest 10 per cent in 2018/19 while the brunt of the downturn has been observed in approvals for apartments which contracted by 30.1 per cent in the year to June 2019.”
But he added that in recent months the fall in approvals has shown signs of easing — which could signal that the bottom being reached.
“Building approvals in the month of June fell a modest 1.2 per cent. If the market stabilises at this level, it will remain well above previous market troughs.”
Add to that the fact that data came before lending conditions were relaxed and recent interest rate cuts.
June figures saw seasonally adjusted building approvals drop 1 per cent in Queensland, New South Wales -5.4 per cent, Western Australia -8.6 per cent and Tasmania -11.9 per cent while Victoria was up 9.7 per cent and South Australia flatlined.
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