The number of new approved homes saw a dramatic fall of 27.9% to 12,916 in seasonally adjusted terms in January as the Omicron variant slowed administration processes, according to new data from the Australian Bureau of Statistics (ABS).
Daniel Rossi, director of construction statistics at the ABS, said the value of total approved buildings went down 27.7% in January, driven by a 36.8% fall in the value of approved non-residential buildings.
Private sector house approvals also fell 17.5% in January, but were still 0.8% higher than pre-pandemic levels during the same month.
Total approvals plummeted across most states, rising only in Queensland at 0.5%. Victoria, South Australia and New South Wales took the biggest hits with drops of 35.5%, 29.2% and 25.9%, respectively. The results are a reminder for the government not to be too complacent about the post-pandemic recovery after Omicron, argued shadow treasurer Jim Chalmers.
“We’ve had now five or six times where the treasurer has said the economy’s roaring again and that it’s all fine,” Chalmers told ABC radio. “It’s why we need a genuine plan to get the economy growing and not just more of these billions of dollars of political patch-ups… and waste and mismanagement that we currently see in the budget.”
Last month, the ABS also reported that employees worked 159 million fewer hours in January than in December – a likely contributor to the fall in housing approvals due to the increased use of annual and sick leaves in the first two weeks of January.
However, Tom Devitt, economist at the Housing Industry Association (HIA), said the usual number of approvals is expected to return as the nation moves past the Omicron wave.
“The absence of council workers, private certifiers and building business staff will have weighed on the ability to process approvals,” Devitt said. “There are no indications that home building activity is facing weak demand any time soon, despite temporary interruptions from the Omicron outbreak in January.”
