The number of dwellings approved in January 2010 sank by 7% following a rise in the previous month, according to the Australian Bureau of Statistics. The dramatic drop was mostly due to a slump in approvals for privately owned apartments and houses.

Tasmania recorded the biggest fall in the number of dwellings approved in the same period (down 27%), while Victoria fell by 15.9% and Queensland slid down 7.4%. The value of total building approved fell 24.6% in January, with the value of both residential (-6.2%) and non-residential building approvals (-41.9%) falling.

Yet in spite of the poor start to 2010, building approvals remain nearly 50% higher than they were 12 months ago and augur well for a spirited recovery in housing starts this year, according to HIA senior economist, Ben Phillips. “The fundamentals of strong population and employment growth can be expected to push high housing demand. Without an adequate supply response, price pressures and further erosion of housing affordability will be inevitable,” he said.
HIA is forecasting a boost in housing starts of 16% in 2010 compared to the disastrous year seen in 2009.