Canberra building approvals slump for fourth month in a row

Australian Bureau of Statistics figures show the ACT recorded its fourth consecutive slump in building approvals this year following a small increase of 1.2 per cent in January.

It aligns with data out earlier this week which indicated a weakening in Canberra's housing market.

The building approvals data shows the territory recorded a fall in trend terms of 9.5 per cent in May after a slump of 10.2 per cent in April.

The ACT has recorded falls in the number of building approvals in nine out of the last 12 months.

Canberra’s fall follows a national decline in approvals in trend terms of 1.7 per cent, the fifth consecutive month of falls.

The value of building work in the territory dropped from $102.6 million in April to $87.4 million in May.

The Housing Industry Association attributes the drop in building approvals to a decline in consumer confidence following the federal budget

ACT executive director Neil Evans said negative sentiment was one of the key drivers behind the fall in approvals with public service job cuts hanging over the city.

But he said the number of building approvals the association forecast for the calendar year of 3500 was still higher than the long-term average of about 2300.

Mr Evans said the housing market was coming off record highs in recent years so the fall did not represent a massive problem for the sector. “I think everyone thinks it’s worse that what it is,” he said.

Housing data released earlier in the week showed a weakening in the established house market, also attributed to declining confidence.

The RP Data-Rismark June home value index, issued on Tuesday, showed that Canberra home values had fallen 0.5 per cent in the first quarter of the year.

RP Data senior research analyst Cameron Kusher said the market had experienced signs of slowing in the past three months due to weakening consumer confidence because of the federal budget.