Approvals drop as the Treasurer allays house price concerns
Dwelling approvals have fallen a further 3.4 per cent, as the treasurer tries to downplay the impact of tax changes on property prices.
THE treasurer has sought to allay concerns that contentious tax changes in the budget are not the sole cause of a decline in property prices, as the number of new homes being built has declined.
Federal parliament on Tuesday is set to debate changes that would limit negative gearing to new properties from July 2027, while replacing the 50 per cent capital gains tax discount with an inflation-linked rate.
After the first data released since the May budget showed property prices falling in major capital cities, Treasurer Jim Chalmers said the market had already been experiencing a price downturn.
“We had seen the housing market already softening a bit before the budget. The budget decisions, the tax reforms in the budget are not the only factor when it comes to the housing market,” he told ABC Radio.
“What we want to see is … first homebuyers getting a fair chance at auctions, and so we’re seeing that increasingly.”
Dwelling values fell 0.9 per cent in Sydney and 0.8 per cent in Melbourne during May, according to data from research agency Cotality.
Auction clearance rates have also declined in the weekends following the May budget, which Dr Chalmers said had been softer before it.
He said the Treasury had forecast that house prices would continue to increase, but at a slower rate than before.
“Our job here is not to target a particular price outcome; our job here is to make sure that there are more affordable options for first homebuyers to get a toehold in at what has been a really difficult market historically,” Dr Chalmers said.
It comes as the latest figures from the Australian Bureau of Statistics showed the total number of dwellings approved in April fell by 3.4 per cent.
The fall was driven by a 3.6 per cent drop in the number of private dwellings approved, excluding houses, after a 25.7 per cent decline the month before.
The bureau’s head of construction statistics, Daniel Rossi, said the number of dwellings being approved was still 10.2 per cent higher year-on-year.
“Private sector house approvals fell one per cent, but remain at elevated levels,” he said.
“This is the third consecutive month with over 10,000 private sector houses approved. The last time this occurred was during the final three months of 2021.”
NSW was largely behind the fall in private-sector housing approvals, dropping by 132.8 per cent in the month.
It followed the previous month, which had the highest house approval levels in almost four years.
However, South Australia increased by 11.4 per cent and Victoria by 2.2 per cent in the same time.
