Building approvals down by one third compared to last year: ABS

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Building approvals are down about one third compared to where they were in 2021, data from the Australian Bureau of Statistics shows.

Building approvals down by one third compared to last year: ABS
Building approvals are down about one third compared to where they were in 2021, data from the Australian Bureau of Statistics shows.

The total number of dwellings approved continues to fall around Australia as the rising cost of building materials, as well as delays and shortages in supply continue to challenge the construction sector.

Across April, the total number of dwellings approved dropped by 2.4 per cent month-to-month, according to data released by the Australian Bureau of Statistics (ABS).

The drop, which is seasonally adjusted, follows a 19.2 per cent fall in March compared to similar data from February.  Compared to this time last year, approvals are down by 32.4 per cent. 

Master Builders Australia (MBA) chief executive Denita Wawn says the decline in approvals across Australia comes down to the rising cost of materials, labour and product shortages, along with other reasons.

"These include the phasing out of the HomeBuilder scheme as well as emergence of challenges in the business environment," she says. 

"The cost of building materials is growing at its fastest rate in over 40 years while delays and shortages with respect to both labour and products continue to obstruct building activity."

"For our industry, the most immediate challenge relates to the supply of building products and the people we need to carry out the work. We look to working with the new Federal Government to assist with finding and delivering solutions."

Approvals fell the most in New South Wales where they dipped by -6.8 per cent, while Queensland (-4.5 per cent) and Western Australia (-0.3 per cent) were also affected.

This is in contrast to other states, where dwelling approvals increased in South Australia (+50.3 per cent), Tasmania (10.6 per cent) and Victoria (7.8 per cent).

In the private sector, approved houses stabilised across April, responding to the -3.9 per cent fall in March to rise by 0.5 per cent. Approvals in the private sector rose in SA (+7.7 per cent) and Queensland (+6.2 per cent) but fell in NSW (-3.6 per cent), Victoria (-0.9 per cent) and WA (-0.2 per cent).

"Today’s figures do indicate that demand for new detached house building is holding up reasonably well," Wawn says.

"There was a 0.5 per cent increase in approvals for detached houses during April and the level of activity is still a bit higher than it was immediately before the start of the pandemic." 

Across the country, the value of total building approvals fell by 12 per cent while the value of total residential building increased by 4.7 per cent – a figure driven by a 6.6 per cent rise in alterations and additions and a 4.4 per cent increase in the value of new residential buildings approved. 

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