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The strong volume of house approvals in recent months reflects the significant number of new homes across Australia that had been sold earlier in the year, but not yet approved.<\/p>\n
The data for July 2022 hides the impact that rising interest rates are already having on more timely numbers.<\/p>\n
Mr Devitt said that new home sales across Australia declined by 13.1 per cent in July, following even earlier reports from the industry of a slowing in the number of groups visiting display sites.<\/p>\n
\u201cThis will see weaker sales volumes in the second half of 2022,\u201d he said.<\/p>\n
\u201cApprovals of multi units fell sharply in July, to see approvals in the three months to July 16.8 per cent lower than in the same period in 2021.<\/p>\n
\u201cDespite this decline they remain comparable with volumes of approvals prior to the pandemic.\u201d<\/p>\n
Given the large volume of work under construction and approved but not commenced, there is expected to be a significant lag between the increase in the cash rate and an adverse impact on new home construction.<\/p>\n
\u201cThe long lead times in this current cycle will hide the impact of rate rises and risk the RBA over shooting with unnecessary rate increases,\u201d Mr Devitt said.<\/p>\n","protected":false},"excerpt":{"rendered":"
The most recent building data released from the Australian Bureau of Statistics covering approvals throughout July for detached houses and multi-units show an increase, although there is a downturn in the market. HIA economist Tom Devitt said that building approvals data for July continues to reflect the magnitude of Australia\u2019s existing pipeline of home building […]<\/p>\n