Higher Rates Reflected In SA Housing

The effect of three interest rate rises in 7 months has seen a softening in South Australia ’s housing market towards the end of 2006

Figures released today show that South Australian approvals fell by 12.1 per cent over the month of December to 855.  For detached houses, approvals fell by 12.7 per cent to 697. Approvals of flats, units and apartment fell by 9.7 per cent to 158.

Australia ’s peak building industry body, HIA, said that the figures are a disappointed end to 2006 for South Australian housing. Over the second half of the year there 5,233 dwellings approved, down 15.5 per cent on the 6,197 approvals recorded over the first half of 2006.

HIA’s South Australia Executive Director, Mr Robert Harding, said that the slowing in dwelling approvals over the year coincided with a deterioration in housing affordability, as well as a State economy which has not seen the primary sector gains on offer in Western Australia and the Northern Territory .

“While we are not in a situation of meltdown, this quiet but steady fall in the rate at which new houses are being added to South Australia ’s housing stock is causing distortions throughout the rest of the economy,” Mr Harding said.

“Housing affordability remains stuck at record lows, vacancy rates for rental properties are at breaking point, and there has been no let up in the coast of raw land for development,” he added.

“With an increasing number of South Australian residents either renting or paying off a mortgage, the deterioration in housing affordability and the barriers to bringing affordable housing to market should rank along side climate change and water management as issues of national importance in 2007,” Mr Harding added.

Dwelling Approvals – South Australia

On a state by state basis, seasonally adjusted approvals fell by 25.2 per cent in Tasmania, 5.3 per cent in Western Australia, 1.5 per cent in New South Wales, and 1.4 per cent in Victoria.  Approvals rose by 9.4 per cent in Queensland.