Building approvals fall in June

Softening of the property and residential lending markets has flowed through to the construction sector, as the number of dwellings approved in Australia fell 2.4 per cent in June.

The decline represented the third consecutive fall in monthly building approval figures, according to the Australian Bureau of Statistics.

On a state by state basis dwelling approvals were down in South Australia, Queensland and New South Wales, by 25.4, 8.1, and 6.2 per cent respectively, while numbers were up in Tasmania (21.3 per cent), Victoria and Western Australia (both 1.4 per cent).

Urban Taskforce's chief executive Aaron Gadiel said the figures were particularly concerning for New South Wales where only 28,000 private sector homes were approved for development in 2008/09.

"No Australian capital city approves less new homes per head of population than Sydney," Mr Gadiel said.

"In raw numbers, Melbourne home approvals are soaring, while the number of homes approved in Sydney is almost the same as Brisbane and Perth, despite their smaller population bases,” he said, adding that the federal and state governments should take more steps to boost building activity,” he said.

Housing Industry Association (HIA) chief economist Dr Harley Dale agreed that further policy reform was needed to reduce the obstacles to boosting Australia’s housing supply.

“In many areas of Australia there is a clear affordability disadvantage for new dwellings compared to existing property, attributable to planning delays, infrastructure charges, lack of available finance, and a range of other costs borne by the new home market,” Dr Dale said.