The Australian Bureau of Statistics (ABS) has released dwelling approvals data for the month of July. At the national level, the number of dwelling approvals rose by a seasonally adjusted 10.8% to 14,304. The overall rise was driven by a large increase in the volatile unit & apartments segment, which surged by 24.4% over the month. House approvals also rose but by a more moderate 3.9% Consensus was for a total rise in approvals of 4.0% over the month.
In the year to July 2013, dwelling approvals rose by a seasonally-adjusted 28.3%, again driven by a big lift in unit & apartment approvals (+62.5%), whereas house approvals rose by 12.0%:
A chart showing the time series of seasonally-adjusted dwelling approvals at the national level is provided below, split-out by detached houses and units & apartments:
As you can see, dwelling approvals nationally continue to trend up slowly after bottoming in late-2011, although the uptrend appears to have slowed. This recovery has been driven by a pick-up in both unit & apartment approvals (although they remain volatile) and house approvals (although they remain weak overall).
In annual terms, dwelling approvals are running just above their long-term average levels, as shown by the below chart, with weakness in detached house approvals mostly offset by strength in unit & apartment approvals. However, as noted previously, approvals remain highly depressed overall in population-adjusted terms, given that Australia’s population has grown by around 45% over the past 30-years.
The below chart shows the time-series of approvals at the state level:
This month’s increase in approvals was driven primarily by Victoria, where approvals rose by 22% (696 units) over the month on the back of surging units & apartments (up 70%). ACT approvals also surged – rising by 244% (599 units) – also presumably on the back of some large apartment approvals. By contrast, approvals fell by 7% (-240 units) in New South Wales also on the back of units & apartments (down 15%).
The same data is shown below on a 3-month moving average basis, in order to smooth volatility. As you can see, dwelling approvals are in a strong uptrend in New South Wales and Western Australia, whereas they are trending down in Victoria and are trending up only gently in Queensland and South Australia:
Overall, dwelling approvals continue to bounce around month-to-month on the back of lumpy apartment projects. Still, the recovery in approvals and construction is continues, but at a fairly muted pace, with doubts remaining over whether the RBA’s plan for housing to fill the void left as the mining boom unwinds will be fulfilled.
