Dwelling approvals plumb new lows

By Leith van Onselen

The Australian Bureau of Statistics (ABS) has just released the Building Approvals data for the month of April. At the national level, the number of dwelling approvals fell by a seasonally adjusted -8.7%% to 10,330, driven predominantly by a -11.1% decrease in approvals for private sector houses. The result significantly undershot consensus epectations, which had forecast 0.3% rise.

In the year to April 2012, dwelling approvals fell by 24.1%. 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, Western Australia (-47%) and New South Wales drove the decline in dwelling approvals (-15%), with South Australia (-28%) and Queensland (-3%) also recording falls. By contrast, Victoria (+2%) recorded a small rise over the month.

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, notwithstanding this month’s small rise in Victoria, where approvals remain elevated.

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Comments

    • MontagueCapulet

      It’s only to be expected that we lead the nation in building approvals. Everyone wants to move here to get a job in construction or real estate.

      Dublin of the South? What’s going to happen to our unemployment rate when the building activity drops to half the peak level? There really is a lot of potential for that snowball to gather momentum on the downslope.

  1. Apparently the big decline in WA is due to some administrative issues…

    ‘JP Morgan economist Tom Kennedy said most of the fall from March to April this year could be attributed to a change in the approvals administrative process in Western Australia.

    “As a result, the number of approvals in Western Australia effectively halved in April, as numerous local councils received building application forms written under the old code, which were subsequently rejected.”

    http://www.businessspectator.com.au/bs.nsf/Article/Housing-sector-in-recession-industry-says-UT8GP?OpenDocument&src=hp3