Dwelling approvals fall on units

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By Leith van Onselen

The Australian Bureau of Statistics (ABS) has just released dwelling approvals data for the month of March. At the national level, the number of dwelling approvals fell by a seasonally adjusted -5.5% to 12,599. While detached house approvals rose slightly, (+0.4%), this was more than offset by an -8.3% fall in apartment approvals. Consensus was for a total rise in approvals of 1.0% over the month.

In the year to March 2013, dwelling approvals rose by a seasonally-adjusted 3.9%, with the fall in detached houses (-0.6%) more than offset by a big increase in apartments approvals (+12.3%):

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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:

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As you can see, dwelling approvals nationally were trending down since early 2010, but received a large boost in May and June 2012 when the number of unit & apartment approvals bounced. This unit and apartments boom has been volatile ever since, but has effectively tracked sideways. House approvals have recovered somewhat, but remain very weak overall.

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In annual terms, dwelling approvals are running just below their long-term average levels, as shown by the below chart, with weakness in detached house approvals mostly offset by strength in unit & apartment approvals. However, approvals remain highly depressed overall in population-adjusted terms, given that Australia’s population has grown by around 45% over the past 30-years.

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The below chart shows the time-series of approvals at the state level:

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And the same data is shown below on a 3-month moving average basis, in order to smooth volatility. As you can see, dwelling approvals are in a short-term uptrend in New South Wales, Queensland and Western Australia, whereas they are trending down in Victoria and are going sideways in South Australia:

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Overall, there still isn’t much evidence that Australia is shifting to houses from holes.

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www.twitter.com/leithvo

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.