Media Release
1 July 2009
INVESTORS SIT ON THE SIDELINES AS APPROVALS FALL BACK
Statement by Peter Jones, Chief Economist
The economic downturn and credit squeeze are forcing investors to delay unit and townhouse
developments,
according to Master Builders Australia, the peak body for the building and
construction industry.
Mr Peter Jones, Chief Economist, said “The housing recovery
is threatened by fragile confidence
and
tight lending requirements enforced by the banks as witnessed by
a big fall in approvals of
investor driven units, apartments and townhouses.
He said, “A shortage of stock, high rents and house prices holding up has changed developer logic,
but strict pre-sales and other lending requirements are frustrating investor-driven activity.”
“Signs of the damaging effects of the credit crunch were also revealed in Master Builders’ latest
survey, which found availability of finance remains a concern for builders and developers.
“The fall in house approvals is probably more a reflection of monthly volatility against a strong
upward trend but also highlights the vulnerability of the housing recovery to the Boost scheme.
“Provided investors can overcome the funding hurdles, a recovery in dwelling approvals should still
lead to an improvement in residential building activity next year.”
The total number of dwelling units approved, seasonally adjusted, fell by 12.5 per cent to
9,953 in May, to be 22.4 per cent lower than the same month in the previous year.
Private sector house approvals fell by 2
per cent to
7,831 to be down 8.5 per cent on the
same month last year. The more volatile private sector ‘other dwellings’ (apartments and
townhouses), fell by 43.6 per cent in May to be 57.5 per cent lower than in May 2008.
The value of non-residential building approvals, seasonally adjusted, fell by 20.9 per cent in
May, to be 40.4 per cent lower than in May 2008.
For further information: Peter Jones, Chief Economist, Mobile 0403 440 838
NEWS 
