The Australian Bureau of Statistics (ABS) has released dwelling approvals data for the month of June. At the national level, the number of dwelling approvals fell by a seasonally adjusted 6.9% to 12,778. The overall fall was driven by a large decline in the volatile unit & apartments segment, which fell by 12.6% over the month. House approvals also fell but by a more moderate 1.2% Consensus was for a total rise in approvals of 2.0% over the month.
In the year to June 2013, dwelling approvals fell by a seasonally-adjusted -13.0%, again driven by a big fall in unit & apartment approvals (-37.4%), partly offset by a 9.9% increase in detached house approvals:
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 continue to trend up slowly after bottoming in late-2011, although the uptrend appears to have slowed. This recovery has been driven by a pick-up in both unit & apartment approvals (although they remain volatile) and house approvals (although they remain weak overall).
In annual terms, dwelling approvals are running around 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, as noted previously, approvals remain highly depressed overall in population-adjusted terms, given that Australia’s population has grown by around 45% over the past 30-years.
The below chart shows the time-series of approvals at the state level:
This month’s decline in approvals was driven primarily by Victoria, where approvals fell by 24% over the month, mostly on the back of reduced units & apartments (down 40%). By contrast, approvals rose by 7% in New South Wales on the back of units & apartments (up 19%).
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:
Overall, the recovery in dwelling approvals, and housing construction more generally, appears weak, threatening the RBA’s plan for housing to fill the void left as the mining boom unwinds.