Building approvals slumped dramatically in January, new data has revealed, reigniting concerns about the ongoing level of underbuilding in Australia.
According to the Australian Bureau of Statistics, total residential building approvals fell by 15.9 per cent in January to be 24.8 per cent down year on year.
The falls were worst in Tasmania with a decline of 34.9 per cent in building approvals, followed by Queensland at 29.9 per cent and South Australia at 20.9 per cent.
Residential building groups have been quick to voice their concern over the figures.
Peter Jones, chief economist at Master Builders said the latest setback was not simply due to weather events but more to do with caution in the face of ongoing interest rate hikes.
“The much anticipated upswing in residential building activity is now in doubt with further fallout expected to dampen prospects for a private sector revival in residential building.
“A long and strong residential building upturn is desperately needed given that we have been underbuilding in Australia over the past six or seven years.”
HIA senior economist Andrew Harvey echoed similar sentiments.
“The January 2011 fall in approvals is the worst monthly decline we have seen since September 2002 and as HIA has been noting for some time now we are in for a considerably weaker year of residential building in 2011,” he said.
“Today’s poor approvals numbers emphasise the extent to which the non-mining sectors can be squeezed as the RBA hikes rates to control price pressures coming out of the mining sector.
“Moreover, it reinforces the urgent need for a dedicated housing ministry in the Gillard Government and serious reforms to the supply side of Australia’s housing market.”