Figures recently released by the Australian Bureau of Statistics (ABS) indicate that Australia’s total number of new dwelling approvals shrank significantly in March 2017, after having risen over the previous two months.
The seasonally-adjusted statistics show an overall 13.4% drop in Australia’s dwelling approvals from February 2017 to March 2017. Approvals for houses fell by 4.3%, while approvals for apartments fell by a whopping 22.5%.
On a state by state basis, trend estimates for dwelling approvals in New South Wales, Victoria and Queensland all rose in March 2017, while South Australia and Western Australia’s trend estimates for dwelling approvals all fell in March 2017.
What does this mean for the housing market?
As summarised by Australia’s Parliament House:
“The number of dwelling units approved in a month is a useful indicator of the strength of consumer and investor confidence and a leading indicator of economic activity within the building sector and the wider economy.”
With this in mind, recent falls in new dwelling approvals across Australia could be an indicator of challenging times ahead for the Australian economy, from employment in the construction industry to investment in the property market.
A more limited supply of new apartments in particular could pose a challenge for property investors to face in the future, on top of tighter government regulations on investment lending, and higher interest rates on investor loans.