Building approvals fall again

ABS Building Approvals for June are out and the best one can say is that there’s more space for mining to grow into. The ongoing fall is broad based and takes in both residential and commercial construction.  The drop is not as bad as last month thankfully but there is still considerable downward momentum, even if some is still give back from last year’s stimulus. I will return with more on this…

JUNE KEY POINTS

             TOTAL DWELLING UNITS

  • The trend estimate for total dwellings approved fell 1.6% in June 2011 and is now showing falls for eight months.
  • The seasonally adjusted estimate for total dwellings approved fell 3.5% following a fall of 6.3% in the previous month

             PRIVATE SECTOR HOUSES

  • The trend estimate for private sector houses approved fell 1.0% in June and has fallen for 18 months.
  • The seasonally adjusted estimate for private sector houses approved fell 3.2% in June following a rise of 0.8% in the previous month.

             PRIVATE SECTOR OTHER DWELLING UNITS

  • The trend estimate for private sector other dwellings approved fell 2.0% in June and is now showing falls for six months.
  • The seasonally adjusted estimate for private sector other dwellings approved fell 4.2% following a fall of 16.2% last month.

             VALUE OF BUILDING APPROVED

  • The trend estimate for the value of total building approved fell 2.0% in June and is now showing falls for eight months. The trend estimates for the value of building approved should be interpreted with caution. See the data notes on page 2 of this publication.
  • The seasonally adjusted estimate for the value of total building approved fell 2.2% in June following a fall of 3.6% last month. The seasonally adjusted estimate for the value of total residential building fell 4.1% and the value of non-residential building rose 1.3%

 

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

    • I love Mad Adam’s take:

      “A fall in building approvals is good for house prices,’’ said ICAP Australia senior economist Adam Carr. “It should ensure we don’t see a marked drop-off in prices.”

      “We’re just seeing a consolidation,” Mr Carr said, adding that any squeeze in new housing supply means ”we may see modest price growth going forward.’’

      He estimates that building approvals are running at about 10 per cent below their long-term average.

      ‘‘We’ve never really had a glut of housing so to have a protracted period of below-average housing starts suggests one thing: a rental squeeze and house prices going up.’’

      Mr Carr said that despite the recent poor figures, the fundamentals of Australia’s housing market remain excellent.

      ‘‘People just have to get used to idea that house prices aren’t going up 30 per cent every year – that includes developers too.”

      • Oh.. I didn’t know Mad Adam was a bullhawk too. I thought only Joye and Bloxo were founder members of the Bullhawk club.