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No need for panic as SA building approvals down

Business

It’s been a bumpy few months for building activity, but South Australia’s peak construction body says there is no need to panic.

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Building activity in South Australia experienced a 14.9 per cent drop with approvals for September falling from 997 to 848 approvals, seasonally adjusted.

The decline in applications was the second largest drop for all states and territories. Queensland enjoyed the biggest jump in building approvals with 41.6 per cent increase and NSW fell the most with a 16.6 per cent reduction.

In the greater Adelaide region, 476 new homes and 284 dwellings (flats, apartments) were approved

Total value of building works in SA, seasonally adjusted, for September topped $339,358,000.

Nationally, housing approvals fell by 1.9 per cent (seasonally adjusted) after having a 4.1 per cent rise in August.

Other private sector dwellings, such as apartments and flats, rose nationally in September by 6.1 per cent after falling by 15.6 per cent the previous month.

Master Builders SA stated the dip in state building approvals for September was no cause for panic, but there was a clear need to leverage the current favourable conditions to trigger a new wave of construction.

ABS figures showed a 7 per cent fall in the number of new dwellings approved for the month of September and a 3 per cent drop in the value of new building work compared to August 2015 as measured on a trends basis.

Master Builders SA Director Policy and Communications Russell Emmerson said there was scope for improvement.

“There have been 10,884 dwellings and alterations approved in South Australia over the past 12 months, significantly below the annual average of 11,351 approvals over the past 10 years,” he said.

“At the same time, the value of those approvals has dropped from an annual average of $7.1 billion to $4.2 billion in the past 12 months.

“The figures lend themselves to a very clear picture: interest rates are low, there is spare capacity, so there is great scope for growth within the sector. As South Australian consumers and businesses become more confident and invest, there will be greater competition for the best building talent, and upwards pressure on prices.

“Now really is the best time to invest in building.”

The value of work done in the non-residential sector remains relatively flat compared to the past 12 months but is significantly lower than the 10-year average.

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