The slowdown in building approvals across Australia is brought about by several factors and the availability of finance is one of the biggest ones.
Housing Industry Association (HIA) principal economist Tim Reardon said the cooling housing market had been apparent throughout 2018, with approvals in the third quarter hitting 6.6% lower than the previous period. In monthly terms, building approvals rose by 3.3% in September. Comparing it to last year, approvals for the said month were 11.1% lower.
The biggest decline in approvals was seen in South Australia at 21.2%, followed by Western Australia (8.7%), Victoria (8.4%), New South Wales (7.5%) and Queensland (4.2%).
"The housing market has been cooling modestly since a peak late in 2017 with the majority of the decline occurring on the apartment side of the market," Reardon said, citing the constraints in the availability of finance as one of the main contributing factors.
In his view, finance has become increasingly hard for home buyers to access due to the rising borrowing costs. This situation has eventually curtailed credit growth.
"Falling house prices in metropolitan areas have also contributed to banks tightening their lending conditions which have further constrained the availability of finance," he said.
The slowing population growth since last year has also caused a significant decline in housing demand most especially in metropolitan areas.
“Irrespective of all of these negative influences, the volume of approvals for new detached houses remain close to their strongest levels in 15 years, as the decline in approvals is occurring," Reardon said.