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Building approvals fell sharply during Omicron outbreak

Media release

Building approvals fell sharply during Omicron outbreak

Media release
“Building approvals fell by a remarkable 27.9 per cent in January 2022, as Omicron disrupted the record boom in home building,” stated HIA Economist Tom Devitt.

“Approvals for detached houses fell by 17.3 per cent and 43.6 per cent for multi-units. 

“This sharp fall in January can be attributed to staff shortages during the Omicron outbreak and a higher than usual uptake of holiday leave.

“There are no indications that home building activity is facing weak demand any time soon, despite temporary interruptions from the Omicron outbreak in January.

“The absence of Council workers, private certifiers and building business staff will have weighed on the ability to process approvals.

“We anticipate an above average volume of approvals will be reported in coming months as the impact of this disruption fades.

“Early indications are that home building bounced back as the Omicron wave abated and builders were able to return to work.

“There are more homes under construction at present than in any previous cycle and this will continue to grow until mid-2022.

“The elevated volume of homes approved, but not yet commenced construction, will ensure that January’s brief disruption won’t change builders’ busy schedule this year.

“The Reserve Bank has retained its ‘patient’ stance regarding its record low cash rate, as it waits for consumer behaviour to normalise, supply chain issues to ease and other international developments to emerge. 

“This will help ensure that the salient constraint on builders this year remains the price and availability of land, labour and materials, not weak demand,” concluded Mr Devitt.

In seasonally adjusted terms, total residential building approvals decreased in the last three months compared to the previous quarter in Western Australia (-21.0 per cent), New South Wales (-19.1 per cent), Victoria (-13.4 per cent), South Australia (-5.8 per cent), and Queensland (-5.7 per cent), while in original terms, increasing in the Northern Territory (+3.4 per cent), the Australian Capital Territory (+11.0 per cent) and Tasmania (+11.1 per cent). 

 
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