"Woeful" building numbers have the housing industry pleading for a rate cut when the RBA meets today.
ABS figures have revealed a 3.1% decline for detached house approvals for February, along with a 16.6% drop for other dwellings. The decline was spurred by a 41.2% plummet in NSW building approvals. HIA chief economist Harley Dale said approvals had fallen to their lowest level in nearly three years.
"Today's building approvals outcome is, quite frankly, woeful, even allowing for New South Wales virtually driving the entire fall. It is difficult to be positive about the short term prospects for new housing when a 7.8% decline in building approvals in February 2012 takes them to their lowest level since March 2009. Furthermore, the level of approvals over the three months to February implies annual housing starts hitting a level lower than the GFC trough of 2008/09," Dale said.
Master Builders chief economist Peter Jones claimed the drop would further exacerbate Australia's housing shortage.
"The current level of dwelling approvals is running at 130,000 annualised, way below what’s needed to even provide for population growth let alone to begin to eat into the housing shortage estimated by the Government’s own Housing Supply Council at more than 200,000 dwellings," Jones said.
Both Jones and Dale have called on the Reserve Bank to cut rates when it meets today to provide stimulus to the flagging industry.
"Australia's interest rate settings are clearly too high, and there needs to be immediate Federal and state government focus on policy reform to boost flagging levels of new housing supply," Dale said.
'Sluggish growth at best' for 2012
Housing policy moving at 'glacial pace': HIA