The Australian Bureau of Statistics (ABS) has just released the Building Approvals data for the month of July. At the national level, the number of dwelling approvals fell by a seasonally adjusted -17.3%% to 11,306, driven predominantly by a -40.5% decrease in approvals for private sector units and apartments. Consensus was for a total 5% decline.
In the year to July 2012, dwelling approvals fell by a seasonally-adjusted -10.6%. 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 were trending down since early 2010, but received a large boost from May when the number of unit & apartment approvals bounced. This unit and apartments surge was short lived, however, with unit & apartment approvals reversing over the past two months.
The below chart shows the time-series of approvals at the state level.
You can see that the recent approvals bounce and this month’s reversal has been driven by Victoria, with approvals in the other states remain remaining relatively subdued.
In light of ongoing sluggish new house sales, there’s not a lot of joy in this release for Australia’s home builders, nor the construction industry more generally, which appears to be entering recession (if not there already).
Twitter: Leith van Onselen. Leith is the Chief Economist of Macro Investor, Australia’s independent investment newsletter covering trades, stocks, property and yield. Click for a free 21 day trial.
