When the federal and state governments imposed restrictions in March to contain the coronavirus epidemic, many market observers quickly anticipated a sharp drop in building approvals. This was not the case, however, according to the latest figures from the Australian Bureau of Statistics (ABS).
Residential building approvals fell 1.8% on a seasonally adjusted basis in April, defying the double-digit decline predicted by market observers. In terms of trend, approvals increased by 1%, driven by both houses and units.
"These results are consistent with the indicators put forward in early 2020, before the start of the COVID-19 pandemic restrictions. Construction approvals generally lag behind early indicators of housing demand, such as new home sales and new loan commitments, "said Daniel Rossi, director of construction statistics at ABS.
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While all major states have registered approval gains in homes and units, New South Wales has driven Australia's overall growth, said Maree Kilroy, economist at BIX Oxford Economics.
"A major correction of new high density approvals in New South Wales has constrained adjoining national dwellings to be negative," she said.
She said that the growth in approvals, particularly for homes, was likely a continuation of building requests from the beginning of March, obtaining approval and not representative of the new request in April.
"Housing approvals are expected to deteriorate in the coming months, with all demand channels affected by the COVID-19 shock," she said.
The expected decline in approvals over the next few months is likely to be due to lower sales of entirely new apartments and land.
"The federal government has indicated that targeted stimulus measures for new housing are underway, but this would likely not be seen in the approval data for at least a few quarters," she said. declared.
Adelaide Timbrell, economist at ANZ, said approvals have yet to feel the effects of the COVID-19 epidemic.
"Our May housing report shows that the impacts of COVID-19 on population and employment are likely to reduce the demand for new housing, especially by investors," she said. said in a report published by the AAP.
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