Approvals figures for dwellings, that is apartments and houses, have been heading south since mid-2018. As an indicator of investor confidence, falling approval figures represent a worrying signal, not just for the building sector but for the overall economy. There had been some expectation of a recovery in recent months but quality concerns in the high rise sector appear to be adding a new complication.
The Australian Bureau of Statistics has now released the latestt figures from August and total residential approvals fell by 1.1% on a seasonally-adjusted basis, less than the 2.0% increase which had been expected but a substantial improvement on July’s figure of -9.7%. On an annual basis, total approvals fell by 21.5%, which is also an improvement on July’s comparable figure of -28.2% after revisions.
Westpac senior economist Matthew Hassan said, “Dwelling approvals have yet to form a base. They are now at their lowest level since January 2013 and are below the estimated level of underlying requirements. A key concern is further downside risks to the high-rise segment.”