The number of building approvals nosedived by a shockingly large 8.1 per cent in October - ending the previous month's short-lived revival - with economists tipping the decline to continue well into next year.
Approvals for private sector houses fell 7.0 per cent on a seasonally adjusted basis, while the “other dwellings” category that includes apartment blocks and townhouses fell 11.3 per cent.
Market consensus had been for total approvals to fall by just 1.0 per cent after September’s surprising 7.6 per cent jump.
On an annual basis, the fall in total building approvals steepened to 23.6 per cent from 19.0 per cent a month earlier, the Australian Bureau of Statistics said on Monday.
There were 551 fewer houses and 495 fewer “other dwellings” approved in October, pulling down the value of total buildings approved by 4.7 per cent.
The Housing Industry Association said the decline over the past year had been driven by underwhelming economic conditions and a tighter credit environment.
“It is evident that the pick-up seen in other indicators including housing finance and new home sales is yet to flow through to building approvals,” HIA economist Angela Lillicrap said.
Ms Lillicrap said she was was hopeful of a recovery in the new home market over the coming months.
BIS Oxford Economics’ Maree Kilroy said any uptick in approvals was unlikely before the June quarter.
“As expected, all eastern seaboard states saw a weaker detached house result, with the continued leg down in greenfield land sale volumes coming through in the October data,” Ms Kilroy said.
In trend terms, the number of approvals fell by 0.8 per cent in October, the 23rd month it has fallen.
Total dwelling approvals dipped most sharply in the Northern Territory (down 11.1 per cent, NSW (4.6 per cent), Queensland (1.4 per cent) and WA (1.0 per cent), in trend terms.
Ms Kilroy said monthly approvals for houses fell to their weakest level since 2013/14 in both NSW and Victoria.
The Australian dollar dipped slightly upon the release of the data but quickly regained ground and rose to 67.74 US cents by 1305 AEDT.