By Leith van Onselen
The Australian Bureau of Statistics (ABS) has just released the Building Approvals data for the month of February. At the national level it is another shocker with the number of dwelling approvals falling a seasonally adjusted 7.8% to 10,771, compared to a downwardly revised 11,688 units in January. Economists had forecast a 3% fall.
In the year to February, building approvals fell by 15.2%. The key figures are provided in the below table:
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 for both houses and units & apartments have been trending down since early 2010, and are nearing the lows of early 2009, when the building industry was in a global financial crisis induced funk and the first home buyers’ bonus had yet to take effect.
At the state level, it was less dire. New South Wales drove the decline, down a seasonally-adjusted -41% in February. By contrast, the other states recorded increases in dwelling approvals, led by Queensland (+13%), Tasmania (+11%), South Australia (+10%), Western Australia (+6%) and Victoria (+1%).
The below chart shows the time-series of approvals at the state level. Due to the high volatility of the series, this is presented on a 3-month moving average (3MMA) basis:
As you can see, the trend in dwelling approvals is down everywhere, not withstanding Queensland’s small recent bounce, with Victoria’s approvals falling sharply from recent record highs (although still elevated).
When combined with the highly subdued new home sales reported on Friday by the Housing Industry Association, the building industry must be getting very nervous. Cue heightened calls for interest rate cuts and further housing stimulus.