“The trend of a cooling housing market, which has been evident throughout 2018, continued in the three months to September 2018 with approvals now 6.6 per cent lower than the preceding quarter,” stated Tim Reardon, HIA’s Principal Economist.
ABS data shows that building approvals rose by 3.3 per cent in the month of September 2018. Despite this increase they remain 11.1 per cent lower than in the same quarter in 2017.
“The housing market has been cooling modestly since a peak late in 2017 with the majority of the decline occurring on the apartment side of the market,” added Mr Reardon.
“The market is cooling for a number of reasons most notably due to constraints on the availability of finance.
“Finance has become increasingly difficult to access for home purchasers. Restrictions on lending to investors and rising borrowing costs have seen credit growth squeezed. Falling house prices in metropolitan areas have also contributed to banks tightening their lending conditions which have further constrained the availability of finance.
“In addition, a slowing in Australia’s population growth since June 2017 coincides with changes to visa requirements announced early in 2017. Since then, Australia has experienced almost a year of slowing population growth.
“Irrespective of all of these negative influences, the volume of approvals for new detached houses remain close to their strongest levels in 15 years, as the decline in approvals is occurring,” concluded Mr Reardon.
Total seasonally adjusted dwelling approvals in the September 2018 quarter fell in South Australia (-21.2 per cent), Western Australia (-8.7 per cent), Victoria (-8.4 per cent), New South Wales (-7.5 per cent) and Queensland (-4.2 per cent). Seasonally adjusted approvals increased in Tasmania by 8.5 per cent. In trend terms, total dwelling approvals in the September 2018 quarter decreased by 7.5 per cent in the Northern Territory and by 2.3 per cent in the Australian Capital Territory.