Building approvals have taken a real dive for the past three months. And while it’s bad news for the construction industry, it’s also likely to impact Australia’s residential rental market.

Here is the latest release from the Australian Bureau of Statistics (ABS) for November 2022.

The November 2022 seasonally adjusted estimate:

  • Total dwellings approved fell 9.0%
  • Private sector houses approved fell 2.5%, while private sector dwellings excluding houses fell 22.7%
  • The value of non-residential building rose 2.0%
  • The value of total building fell 1.5%

Building approvals for high-density dwellings took a major hit, plummeting by almost 25% in just one month. The latest data from the Australian Bureau of Statistics, released on January 9th, highlights the severe economic pressures faced by the building and construction industry.

Dwelling approvals hit a new low, down 22.7% for private sector dwellings and 2.5% for private sector houses. The total number of dwellings approved dropped 9.0% in the month, following a 5.6% decrease in October. This marks the third consecutive month of decline, with a 21.7% drop since August, according to the ABS.

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Total dwelling approvals dropped in New South Wales (-18.4%), Western Australia (-17.5%), Victoria (-12.7%), and Queensland (-5.6%), while Tasmania (75.7%) and South Australia (10.0%) saw increases. Private sector houses approvals fell in most states, Victoria (-8.0%), Western Australia (-6.1%), South Australia (-2.6%), and Queensland (-1.2%), while New South Wales rose 1.2% in November.

The value of total building approvals dropped 1.5% in November, after a 0.4% decrease in October. Total residential building approvals fell 4.0%, with a 3.1% decrease in new residential building and 9.2% decrease in alterations and additions. Non-residential building approvals remained strong, rising 2.0%, following a 2.3% increase in October.

The drop in multi-dwelling approvals is a setback for curbing urban sprawl, as higher urban density is crucial for housing growing populations.

The next release of Building Approvals is expected on 2 February 2023.