Buildings approvals for housing in Victoria have declined in November according to new data released by the Australian Bureau of Statistics.
The value of Victorian building approvals for the year to November was worth $39.5 billion, with the value of approvals in November alone increasing by 8.2 per cent to $3.49 billion.
Non-residential building approvals were found to be up 27.1 per cent to $1.4 billion, which is 14.6 per cent higher than in 2018.
Acting Premier and Treasurer, Tim Pallas, said the results will benefit Victorians as critical infrastructure such as hospitals and schools is built to support population growth.
The total number of approvals fell by around 14.6 per cent in November 2018, while approvals for detached houses also declining by 6.1 per cent. Approvals for multi-unit houses fell by 25.8 per cent.
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Housing Industry Australia (HIA) Executive Director – Victoria, Fiona Nield, said the statistics show that after a recent sustained boom, residential building activity in Victoria has continued to cool.
“Despite the declines in November, both detached house and multi-unit home approvals remain at historically high levels thanks to the phenomenal activity of recent years,” Nield said.
“However, the declining phase for the cycle is well and truly underway. Approvals are well down from their earlier peaks – especially multi-unit homes.
HIA has forecast the declines in approvals will see construction activity fall by around 20 per cent in 2018/19.
Nield said while this would be a significant drop from the recent peak, it would still see a level of activity that was not too far below historical levels.
“APRA introduced caps on investor and interest-only lending to curb risky lending practices which put an end to the growth phase of the housing cycle. In light of the softening market these caps have been removed but conditions in the lending market remain tight,” she said.
“Processing loan applications has been taking far longer than in the past and a greater number of applications are being rejected. These issues are affecting not just investors, but also owner-occupiers.
“Victoria’s economy is well placed to handle the downturn in the housing market and will continue to support a healthy residential building sector,” Nield said.