Qld Builders warned of tough year ahead
A SLUMP in building approvals coupled with the sluggish economy has prompted the state's peak construction group to issue a warning to nervous builders.
Master Builders Queensland has urged its 8500 members to prepare for a tough 12 months, with building approvals and construction activity "in freefall".
The number of new dwelling approvals across the state has fallen 27.4 per cent compared to June last year, according to the Queensland Government Statistician's Office.
Australian Bureau of Statistics figures show a slight increase, 0.2 per cent, in the total number of dwelling approvals compared to the previous month.
The state's monthly increase compares to a national fall of 1.3 per cent.
In the private sector, Queensland's number of home approvals decreased 0.4 per cent in June, with a total of 1680 houses approved.
The figures paint a bleak picture for the construction industry, which has suffered a downturn through tighter lending conditions and a weak home-buyer market.
"We are gravely concerned, the industry is really in freefall," Master Builders Queensland deputy CEO Paul Bidwell said.
"There are people very nervous and this is across the state and it's across the regions."
The effect of low building approvals, the pipeline for future work, will be felt throughout the financial year, Mr Bidwell said.
For the 2018-19 year 39,000 dwellings - a mix of units, high-rise apartments and homes - will start; down from 49,000 in 2016.
"It's been headed south since that high in 2016," Mr Bidwell said.
"The regions have been in dire straits for the last 18 months. "
Mr Bidwell did not predict "widespread disaster", but encouraged the builders to weather the storm.
"We're optimistic, but not for the next 12 months," he said.
"We think there is light at the end of the tunnel.
"Hang in is what we're saying."
Master Builders Queensland anticipated things would improve with record-low interest rates and the passing of the federal election.
"2019-2020 will be a tough year for the building industry," he said.
"Those approvals are the indication of that.
"That has implications across the economy."
He encouraged the State Government to pull one of its few economic levers to reinstate the $5000 boost to its $15,000 First Home Owners Grant program.
"That extra $5000, actually made the difference between people getting the loan and not," he said.