In housing and construction news, official figures related to the building industry were released today. The Bureau of Statistics data showed that building approvals fell sharply in the month of September. Analysts suggest that the decrease in the number and availability of apartments is behind the statistical slump.

ABS findings showed that figures were down by 2.3 percent, but that multi-unit approvals had plummeted to 5,685, a 22 percent drop in the amount of approvals given to apartment-based developments. Though the data is accurate, researchers within the ABS have noted the ebb and flow of development approvals; if, in one year, there is a sharp rise in development approvals, then the next year will reflect the lack of investment in the market.

For example, in September of 2013, analysts reported a gigantic 40 percent jump in approvals being granted to apartment buildings. Accordingly, the market has reflected the ‘fall back to earth’ and the petering out of investment in apartment construction.

Speaking to the ABC, senior Westpac economist Matthew Hassan described the ‘large pullback’ within the apartment and detached housing market: “Private sector house approvals were also down notably with a 2.3 per cent monthly fall that is a relatively big move for this more stable segment.”

Facing increased housing pressures in high-density urban areas, state and federal governments are anxious about the possible side-effects of an under-performing housing market. The Housing Industry Association’s (HIA) top economist, Shane Garrett, has discussed the possible negative effects of market contractions and the inability of the market to accommodate for increased housing. “Today’s figures provide further evidence that the national recovery in new home building is likely to have passed its peak,” he wrote in a statement. “Recent HIA research shows an annual requirement for 180,000 dwellings to be built each year, the fact that we seem to be drifting below this level of output again is a worrying sign.”

New generations of home owners should be concerned about the volatility of housing affordability and availability. Indeed, it is a ‘worrying sign’ of things to come.


 

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