“The May 2016 building approval datas are consistent with the view that the new housing market is at its peak and is set to slow down,” Wilhelm Harnisch, CEO of Master Builders Australia said.
“Nevertheless, the total number of dwelling units approved will see a solid pipeline of work for the remainder of the 2016 calendar year,” he said.
“Approvals for private sector houses remain resilient bolstered by continuing low mortgage interest rates,” Wilhelm Harnisch said.
“Approvals for new apartments are notoriously volatile however, it is anticipated that approvals for new apartments overall will start to soften in the months ahead,” he said.
“The rate of decline in the new apartments market will largely be determined by the mood of investors,” Wilhelm Harnisch said.
“On the positive side, continued lower interest rates will underpin investment, but this will be mitigated by any uncertainties that may arise in particular by other factors such as the tightening of lending rules and more recently, the outcomes of the recent Federal Election,” he said.
“Total dwelling units approved, seasonally adjusted, fell by 5.2 per cent over the month and minus 9.1 per cent over the year,” Wilhelm Harnisch said.
“Approvals for private houses remain steady but with a significant drop in apartment approvals falling by 11.3 per cent,” he said.
“The falls in apartment approvals were most marked in New South Wales and Queensland,” Wilhelm Harnisch said.