High density housing approvals fall in February
Master Builders Australia CEO has called on the Federal Government to put an end to further interest rate rises to relieve pressure on renters and first homebuyers
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Falling building approvals for higher density dwellings is contributing to the rental crisis, chief economist at Master Builders Australia said today.
Shane Garrett’s comments follow the release of Australian Bureau of Statistic data showing high density approvals had fallen by -9.5 percent during February. He said declining approvals in this sector will put further pressure on renters, as well as first homebuyers.
“The volume of new approvals on the higher density side is now at its lowest in over a decade,” Mr Garrett said. “The output of new higher density homes has been depressed since before the pandemic.
“Inadequate volumes of new supply are contributing to growing difficulties in our rental market. Rents are currently rising at their fastest pace in over a decade.”
Master Builders Australia CEO Denita Wawn said the Federal Government needed to take ‘necessary steps’ to ensure there were no further interest rate rises.
“There is no silver bullet; this will take a concerted effort by all levels of government working in collaboration with industry,” said Ms Wawn.
The seasonally adjusted falls in February are part of a downward trend in the high density sector, which has seen a -45.9 percent drop over the year. This compares with a 11.3 percent uptick in approvals for private sector housing, seasonally adjusted. This sector is down -13.6 percent of the yearly period.
Tasmania recorded the highest increase in overall approvals, up 122.1 percent in February, followed by South Australia at 28.5 percent, NSW (14.0 percent), and Victoria (8.5 percent), while Queensland (-13.7 percent) and Western Australia (-6.4 percent) decreased. Approvals for private sector houses rose in all states.
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The Westpac-Melbourne Institute Consumer Sentiment Index slipped to 84.6 in September from 85.0 in August
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SYDNEY—Australian consumer confidence fell in September amid concerns about job security as economic growth slows to a crawl.
The Westpac-Melbourne Institute Consumer Sentiment Index slipped 0.5% to 84.6 in September from 85.0 in August.
While cost-of-living pressures are becoming a little less intense and fears of further interest rate rises have eased, consumers are becoming more concerned about where the economy may be headed and what this could mean for jobs, said Westpac’s Head of Australian Macro-Forecasting, Matthew Hassan.
Consumers remain concerned about rising inflation, which is stoking concerns that interest rates may rise further, Hassan added.
The report comes a week after data showed the economy barely registered a pulse in the second quarter as consumer spending dropped sharply.
On-year GDP growth in the second quarter was the weakest since the early 1990s, excluding the pandemic years.
At the same time, the Reserve Bank of Australia continued to signal that interest rate cuts are unlikely in the near term, while adding that under certain circumstances a further hike in interest rates may be needed.
The RBA remains concerned about price growth, with core inflation remaining stubbornly elevated at nearly 4.0% on year in the second quarter.
Still, while consumers are downbeat, economists expect spending to regather momentum over coming quarters as income tax cuts delivered in July boost household budgets.
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