Building approvals fell for a third consecutive month and to a two year low in June 2011, with national building approvals sinking by 3.5 per cent in the month.

This followed a 7.9 per cent fall in May.

And for the year, building approvals fell by 15.5 per cent to June, according too the Australian Bureau of Statistics (ABS).

According to the Fairfax news outlets, economists had expected a 3 per cent increase in approvals in the month and a 10.3 per cent fall for the year.

Detached house approvals fell by 3.8 per cent in June to be down by 4.2 per cent over the quarter. Approvals for "other dwellings" fell by 3.1 per cent in June 2011 following a 17.3 per cent drop in May. Over the June 2011 quarter, "other dwelling" approvals fell by 2.1 per cent.

HIA Chief Economist, Dr Harley Dale, said: "Evidence continues to mount of an accelerated deterioration in new home building conditions.

"That situation highlights the appropriateness of continued steady interest rates, the need for stimulus to arrest the new housing decline, and the importance of reform at the October Tax Forum to remove the excessive taxation levied on new residential construction.

"The profile for building approvals is unequivocally weak, implying housing starts running at an annualised level of around 146,000, at best," noted Dale.

"Underlying demographic demand is running at 174,000 dwellings per annum so the maths is rather poor, isn"t it?"

NSW is suffering the worst, according to developer group the Urban Taskforce, which says the private sector home approval rate is plummeting at more than three times the national rate.

The group's chief executive, Aaron Gadiel, said: "NSW already produces less new housing than any other state or territory per head of population.

"But these figures indicate that NSW's performance, relative to other states, may get even worse."

Gadiel added: "The value of non-residential building approvals in NSW has fallen by 57 per cent since March.

"Of all the states, in trend terms, NSW is suffering the sharpest decline in the approval value of new business premises."

In the month of June 2011, seasonally adjusted building approvals fell by 18.5 per cent in Queensland and were down by 12.2 per cent in South Australia, 8.1 per cent in Tasmania, and 3 per cent in Western Australia.

An increase in building approvals was recorded for Victoria, up 6.9 per cent, and New South Wales, up 3.2 per cent. The trend number of building approvals in June 2011 increased by 5.3 per cent in the Australian Capital Territory and increased by 1.3 per cent in the Northern Territory.

Architecture & Design Team

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