Building approvals smashed again

From the ABS today:

TOTAL DWELLING UNITS

  • The trend estimate for total dwellings approved fell 1.7% in February 2011 and is now showing falls for four months.
  • The seasonally adjusted estimate for total dwellings approved fell 7.4% following a fall of 11.6% in the previous month.

PRIVATE SECTOR HOUSES

  • The trend estimate for private sector houses approved fell 0.4% in February and has fallen for 14 months.
  • The seasonally adjusted estimate for private sector houses approved rose 0.2% in February following falls in the previous four months.

PRIVATE SECTOR OTHER DWELLING UNITS

  • The trend estimate for private sector other dwellings approved fell 3.1% in February and is now showing falls for three months.
  • The seasonally adjusted estimate for private sector other dwellings approved fell 20.0% following a fall of 20.4% last month.

So, a ray of light for house approvals. But looks like that has been overwhelmed by the Melbourne apartment boom hitting the wall, which is obvious in this state by state graph:

Other general comments on the release are that although dwelling approvals are down, the value of approvals is still elevated:

However, non-residential approvals are languishing, despite a bit of a bounce in February following the floods. There is not much sign here of the projected mining capex boom. At least, not yet, look at the 07/08 period for comparison:

Houses and Holes

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the fouding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.

He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.

Comments

  1. I read Adam Carr and everything is A-OK, in fact its too good. He sees a rate rise:

    The underlying trends and other data sources show that retail spending remains robust and, alongside strong spending on services, will ensure a rate hike occurs sooner rather than later. Approvals should obviously pick up as reconstruction efforts start.

    • Spending looked pretty strong. Ex food was around 0.9%.

      But certainly hard to extrapolate a rate rise out of today’s data!!

  2. This pours cold water on the ‘under supply’ myth. Clearly there isn’t even enough demand for new dwellings!