Building approvals have dropped to a two year low, new figures have revealed.
According to the Australian Bureau of Statistics, building approvals slipped 3.5 per cent in June, while detached house approvals fell 3.8 per cent to be down 4.2 per cent over the quarter.
Approvals for ‘other dwellings’ fell by 3.1 per cent in June, following a 17.3 per cent drop in May.
HIA chief economist Dr Harley Dale said the slump in approvals is evidence of an accelerated deterioration in new home building conditions.
“That situation highlights the appropriateness of continued steady interest rates, the need for stimulus to arrest the new housing decline, and the importance of reform at the October Tax Forum to remove the excessive taxation levied on new residential construction,” Dr Dale said.
“The profile for building approvals is unequivocally weak, implying housing starts running at an annualised level of around 146,000, at best.
“Underlying demographic demand is running at 174,000 dwellings per annum so the maths is rather poor, isn’t it?”