Australian construction losing momentum

Photo credit: 8LettersUK

Building approvals in Australia are losing momentum, according to new figures, which show that growth is slowing down after a booming year.

Building approvals in Australia are losing momentum, according to new figures, which show that growth is slowing down after a booming year.

The ABS data reveals that building approvals increased by 2.2 per cent in September, continuing at a historically high level but much lower than the rocketing growth recorded earlier in the market cycle.

"Around the nation, there was a total of 9,300 ‘other dwellings’ (predominantly multi-unit) approved during September. While this equates to a 6.1 per cent increase in approvals during the month, the level was still well below the high water mark set earlier in the year," explains Housing Industry Association Economist Geordan Murray.

"Approvals for dwellings in multi-unit developments continued to demonstrate a high degree of volatility, particularly at the state level. There were large fluctuations in a number of states, most notably in Queensland where multi-unit approvals jumped by more than 80 per cent," adds Murray. "The increase in multi-unit approvals was balanced by a modest decline of 1.9 per cent in detached house approvals. There were a total of 9,600 new detached houses approved during September, which is consistent with the level we have seen each month since the beginning of 2014."

The HIA predicts that approval numbers will ease back throughout early next year, although the "very large" volume of work in the pipeline will sustain a "very healthy" level of actual building activity throughout the year