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Building approvals still reporting pre-COVID data

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“Building approvals data released today (June 3 2020) by the ABS relates to projects lodged with local councils well before the impact of COVID 19 conditions,” stated HIA Chief Economist, Tim Reardon.

The ABS reported building approvals rose by 7.3 per cent in the three months to April 2020 compared to the previous three months.

“Due to the lag between project development and design, submitting an application for a building approval and obtaining an approval, the majority of these projects would have been envisaged at the start of the year or in 2019, when the housing market was gaining momentum,” added Mr Reardon.

“We do not expect building approvals data to reflect the post-COVID 19 impact until August (2020).

“Detached house approvals were 1.5 per cent higher in the three months to April 2020 compared to the previous three months and 0.3 per cent higher than the same time last year (2019).

“Multi-unit approvals increased by 16.0 per cent in the three months to April 2020 compared to the previous three months and are 1.5 per cent higher than the same time last year (2019).

“All states recorded a monthly increase in approvals with the exception of New South Wales which declined by 29.9 per cent during April driven by a fall in multi-unit approvals.

“The construction industry directly engaged over 1 million people in 2018/19 and contributed 5.8 per cent to GDP. Without appropriate support up to half a million jobs could be at risk,” concluded Mr Reardon.

In seasonally adjusted terms, building approvals for the three months to April 2020 quarter increased in Tasmania (+18.4 per cent), New South Wales (+10.9 per cent), Western Australia (+10.4 per cent) and Victoria (+9.3 per cent). Approvals declined in Queensland (-1.4 per cent) and South Australia (-2.5 per cent). In trend terms, the Northern Territory increased by 28.2 per cent and the ACT increased by 18.7 per cent.

Source: HIA

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