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. May’s figures offered some hope of a recovery and some economists thought at the time the bottom of the cycle may be approaching.
The Australian Bureau of Statistics has now released the latest building approval figures and they indicate any such recovery has not arrived just yet. Seasonally-adjusted, total approvals decreased by 1.2% in June, which is less than the market consensus figure of +0.2% and a deterioration from May’s revised figure of +0.3%. On an annual basis, total approvals fell by 25.6%, as compared to May’s comparable figure of -19.2% after revisions.
ANZ economist Adelaide Timbrell expects a recovery to come. “The sentiment effects from the election, APRA credit easing and rate cuts are yet to flow through to building approvals data, but we still expect a recovery as a result of these changes.”