April building approvals shows there is still work in the pipeline

Total dwelling approvals moved back into positive territory in April, up by 4.4 per cent over the month, measured in seasonally adjusted terms.

“Monthly dwelling approvals data can be lumpy but the latest approvals data suggests there are still projects entering the pipeline and that residential building activity should remain high against historical standards in 2017,” Matthew Pollock, Master Builders Australia’s National Manager Housing said.

“The peak in residential building is likely behind us but the latest approvals data supports the expectation for a moderate fall in residential building activity to levels more in line with underlying demand over the next few years,” he said.

“On the other hand, auction clearance rates remain very high in Sydney and Melbourne and there is evidence that demand for housing is still in excess of supply in a number of jurisdictions. This is putting upward pressure on house prices and will continue to do so if new housing construction once again falls behind,” Matthew Pollock said.

“To ensure supply constraints do not put pressure on future house prices it is important that the Federal Government’s housing affordability measures in the Budget are passed to unlock funding to support reforms which speed up the delivery of residential land and reduce costs during the development phase,” Matthew Pollock said.