The volume of houses and units approved reached 994 in WA last month, as approvals fall to levels not seen since the 1980s.
Dwelling approvals in Western Australia have slumped to a four-decade low, with fewer than 1,000 homes approved for construction last month, Australian Bureau of Statistics data has revealed.
The ABS released its latest building approvals data earlier this week, showing a 20.6 per cent uptick in approvals across the country in the month to May 31.
However, WA’s approvals dropped by 11.1 per cent in the same period, with 994 dwellings approved.
This included 927 detached houses and 77 apartments.
The last time dwelling approvals were at these levels in WA was in July 1983, when they reached 886.
Housing Industry Association regional executive director WA Michael McGowan said the drop in approvals was largely related to the lull in apartment activity.
In addition, the number of new home sales has dropped off since the end of the COVID-related government stimulus.
“What this data reflects is not only the impact of the housing stimulus coming off, but the lack of activity in WA’s apartment market,” Mr McGowan told Business News.
“The detached space keeps ticking along at about 1,000 [building approvals] and is certainly reflective of costs and interest rates.
“Building approvals can be a lagging indicator. We’ve had a 20 per cent month-on-month increase in new home sales since February this year, which we expect to result in more approvals.”
The HIA recently reported a 10 per cent increase in new home sales in the year to May, and a 40 per cent increase on 2019.
“A lot of that is coming from the investment market, which has picked up in WA. East coast investors are less worried about costs and timeframes, and looking to WA because it’s more expensive on the east coast,” Mr McGowan added.
Business News revealed in April that a record 21,524 houses are under construction in WA, as labour shortages and supply chain issues result in build times blowing out delays to home completions.
Residential builders have been under considerable pressure since the onset of the pandemic, with rapid escalations in build prices and low availability of labour and materials catching many off-guard.
Earlier this year, major WA homebuilder BGC Australia stopped taking sales for new homes, as its builds through its pipeline of work.
Nationally, dwelling approvals have dropped by 9.8 per cent drop in the 12 months to May 31.
The ABS attributed May’s national uptick in dwelling approvals to an increase in apartment activity, particularly in NSW.
Approvals for private sector houses was more subdued, with a 7.3 per cent rise in Victoria, 7.2 per cent fall in South Australia, 4.5 per cent drop in WA, 3.4 per cent drop in NSW and 1.8 per cent fall in Queensland.
