AUSTRALIA’S new home approvals have climbed to their highest level in five years, but the housing industry is warning the strength could be short-lived as higher interest rates and rising construction costs begin to bite.
New detached house approvals reached 11,040 in August, up 3.3 per cent on the previous month, according to the latest Australian Bureau of Statistics building approvals data.
Queensland remains among the states driving the increase, with house approvals over the three months to August sitting 12.8 per cent higher than the same period last year.
Housing Industry Association Senior Economist Tom Devitt said the national figures continued to reflect momentum built up before more recent pressures hit the housing market.
“House approvals over the last three months sat 14.6 per cent higher than the same quarter last year, reflecting the market’s momentum heading into this year,” Mr Devitt said.
“There are long lags in home building and it is still too soon to see the impact of this year’s speed bumps on building approvals data.”
Western Australia recorded the strongest seasonally adjusted increase in detached house approvals over the three months to August compared with the same period last year, rising 21.9 per cent.
It was followed by South Australia at 17.5 per cent, New South Wales at 17.2 per cent, Queensland at 12.8 per cent and Victoria at 9.2 per cent.
But the HIA warned several leading indicators were now pointing in the opposite direction.
New home sales fell for a fourth consecutive month in August and were almost 20 per cent lower on a quarterly basis, while fewer prospective buyers were visiting display villages.
Those who were looking were also proving increasingly difficult for builders to convert into signed contracts.
The HIA expects the effects of the more challenging conditions to become increasingly visible.
