The Australian Bureau of Statistics released August building approval figures which were weaker than expected. Total approvals fell 6.9% compared to the expected figure of -2.0% but the fall comes off a revised July figure of 7.9% (initially recorded as a 4.2% rise). The fall was driven by an 11.4% fall in units which appears to be centred in NSW, where unit approvals dropped by 28.5%, although NSW’s unit approval was still up 24.6% on August last year.
Private house approvals were up 4.9% for the month and 3.0% for the year while units were down 11.4% for the month and up 8.6% for the year. Total approvals were up 5.1% for the year to August.
Westpac said the figures suggest the ‘high rise’ boom is over in Victoria but noted approvals for non-high rise buildings in NSW “are showing a renewed rise.” ANZ said the data was “broadly consistent with our view that the housing market is beginning to soften.” Although the bank noted housing approvals are likely to stay at high levels as long as interest rates stay low it noted further growth “appears remote” and may have been part of the rationale behind the bank’s view the RBA will cut rates next year.
Source: ABS, ANZ Research