A report released by the Housing Industry of Australia showed that building approvals slowed down last month, dropping 14.7 per cent in WA.
HIA’s principal economist Tim Reardon said the trend of a cooling housing market had been evident throughout this year and continued into July with an overall of 5.2 per cent decline in building approvals.
Data released by the Australian Bureau of Statistics showed that building approvals in July were 5.6 per cent lower than the same time last year.
Mr Reardon said the housing market had been cooling modestly since a peak late in 2017.
“The market is cooling for a number of reasons including a slowdown in inward migration since July 2017, constraints on investor finance imposed by state and federal governments and falling house prices,” he said.
“Finance has become increasingly difficult to access for home purchasers. Restrictions on lending to investors and rising borrowing costs have seen credit growth squeezed.
“Falling house prices in metropolitan areas have also contributed to banks tightening their lending conditions which have further constrained the availability of finance.
“An increase in interest rates charged by banks will accelerate the slowdown in approvals.
“In addition, a slowing in Australia’s population growth since June 2017 coincides with changes to visa requirements announced early last year.
“Since then Australia has experienced almost a year of slowing population growth.
“Irrespective of all of these negative influences, the volume of approvals for new detached houses have been tracking around their strongest levels in 15 years.”
The ABS data showed that the total seasonally adjusted dwelling approvals in July fell in NSW by 5.2 per cent, Victoria 4.6 per cent and Queensland 6.0 per cent.
In South Australia seasonally adjusted dwelling fell by 26.5 per cent and in Western Australia 14.7 per cent.
Seasonally adjusted approvals increased in Tasmania by 13.6 per cent.