New home approvals in Canberra fell 57.5 per cent in the three months to January, due to about an 80 per cent fall in new apartment approvals over that period.
The ABS on Monday released the latest data on new dwelling approvals across the nation, showing apartment approvals rose 5.5 per cent nationally in the three months to January.
At the same time, approvals for new apartments in Canberra fell from 1335 in the three months to October last year to just 67 in the three months to January this year, or about an 80 per cent fall, with none approved in October and December.
Over the year to January 2018, ACT approvals for new detached homes totalled 1014, approvals for semi-detached dwellings totalled 1009 and approvals for apartments totalled 2444.
That compared with some 106,000 new apartment approvals nationally over the year to January, which Housing Industry Association senior economist Shane Garrett said was "a very high level by historic standards".
Mr Garrett said while the ACT was prone to larger percentage changes in short periods compared to other states and territories, it was a "big fall" for the territory.
But he said in the three months to October last year, several big projects were approved, including a 229-unit approval in Braddon, 243 apartments in Greenway, 209 in Turner and 154 in Farrer in August, which may have contributed to the figures.
Mr Garrett said the high rise approvals activity in that period was "unprecedented" and the fall in the past three months may suggest the multi-unit apartment sector is slowing after a bigger period.
He also said it could be related to the spike in applications for lease variation changes lodged with the planning authority between July and September, though those were largely just for lease variations and not for actual development applications.
But Independent Property Group project planning director David Shearer said he did not believe the tax hike would have had any affect on larger apartment approvals, given it took up to two years from buying land to a final approval.
He said the recent slowdown could instead be related to the difference between development applications lodged and not yet approved, given many of those lodged during the July to October reprieve period from the tax hike had not yet been approved.
Mr Shearer said the bigger effect of last year's budget changes would affect non-Mr Fluffy sites tipped for dual occupancies in the suburbs, which were at a $100,000 "disadvantage" to the Mr Fluffy blocks, based on a $60,000 LVC and $40,000 worth of demolition costs.
"That $60,000 lease variation charge is an impediment and it's unlikely we will see much dual occupancy redevelopment at all until that is reconsidered," he said.
Mr Garrett also said that across the country, the association was forecasting the amount of new home activity to decline, for both detached houses and multi-unit dwellings, with more obstacles for foreign buyers and potential interest rate rises this year.
"while building approvals fell from December to January, the pipeline of work for both residential and commercial builders remains strong in Canberra.
Similarly, Master Builders Association chief executive Michael Hopkins said he expected the figures to "bounce again" in coming months as new projects in planning stages were approved.
"The main area of concern for [our] members remains the short supply of land for single detached houses," he said.
"Despite ACT government policy restricting supply of land, demand from Canberra families for single detached housing remains high."
Mr Hopkins, Mr Garrett and Mr Shearer all highlighted the high price of land in the ACT as leading to pressure on housing affordability, to help address the lack of affordable housing in Canberra.
The government is currently reviewing the lease variation charge system, as part of wider reviews of the territory's planning system and housing affordability strategy.