Severe building slump is about to hit, economists warn

http://www.smh.com.au/business/severe-building-slump-is-about-to-hit-economists-warn-20120202-1qvp3.html

Another fall in building approvals points to a housing industry slump worse than Australia experienced during the global financial crisis, economists say.

Building approvals in December fell 1 per cent to 11,443 units from the previous month, and were down 24.5 per cent over the year, Australian Bureau of Statistics data shows.

“Building approvals in late 2011 imply that housing starts will fall to a level below that experienced during the depth of the GFC, which would clearly be a very unhealthy outcome,” the Housing Industry Association economist Harley Dale said.

Approvals were weaker in Victoria and NSW, which experienced large falls, Mr Dale said.

In Queensland they jumped 24.6 per cent, seasonally adjusted. Approvals in Tasmania and Western Australia also rose.

Economists had forecast an overall rise of 2 per cent for December.

The continuing eight-month decline in approvals would mean building activity was likely to remain soft for some time, the National Australia Bank’s senior economist, Spiros Papadopoulos, said.

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