Building approvals dropped by a seasonally adjusted 4.7 per cent in April as Australia’s housing woes continued.
Approvals for private sector houses dropped 2.6 per cent while the “other dwellings” category, which includes apartment blocks and townhouses, dipped 6.5 per cent.
In the 12 months to April, total building approvals for dwellings fell by a seasonally adjusted 24.2 per cent, the Australian Bureau of Statistics said on Thursday.
The seasonally adjusted declines were worst in Tasmania (19.1 per cent), Victoria (16.1 per cent), Western Australia (6.7 per cent) and South Australia (3.3 per cent).
The figures continue a gloomy trend seen through 2019 so far, with Australia’s housing market already on track for its biggest slowdown since the global financial crisis of 2009.
The market had forecast a flat result for the month and leading Australian economists were split on what it meant and whether housing markets were finding a floor.
Westpac economist Matthew Hassan said the figures were “significantly weaker than expected”, although the timing of the holidays might have exacerbated the decline, as many workers might have taken leave during the period between Easter and Anzac Day.
“Overall, the update again points to weakening momentum, the composition pointing to a weaker construction profile through the middle of the year,” he said.
NAB’s Kaixin Owyong said there “was no sign of stabilisation in the April data as downtrend in house approvals accelerated, falling in trend terms at 1.9 per month … suggesting that approvals have some way further to fall.”
But CommSec’s Craig James said the housing market had simply returned to normal.
“Dwelling approvals over the past year were in line with the decade average,” Mr James wrote.
“Supply and demand have moved into balance and home prices are more likely to track sideways.”
ANZ’s head of Australian economics, David Plank, said the “we think we are getting close to the bottom of the downturn in residential approvals” and the 16.1 per cent rise in non-residential approvals was encouraging.
BIS Oxford Economics economist Maree Kilroy said Victoria had its weakest apartment approvals since 2013.
BIS Oxford Economics expects dwelling approvals to continue to fall over the remainder of 2019, but development such as APRA easing mortgage serviceability guidance and the RBA signalling rate cuts should put a floor under house price declines, she said.
“However, we do not expect this stimulus to flow through positively to new construction until 2020.”