The Australian Bureau of Statistics (ABS) has released dwelling approvals data for the month of December. At the national level, the number of dwelling approvals rose by a seasonally adjusted 9.2% to 18,868. The overall lift was driven by the volatile unit and apartment segment, which jumped by 12.8% in December. However, the more stable house approvals segment also rose by a solid 5.4% over the month.
In the 2015 calendar year, dwelling approvals fell by a seasonally-adjusted 2.5%, driven by falling unit approvals (-6.5%), partly offset by an increase in house approvals (+4.5%):
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 shown above, November’s heavy (-12%) fall dwelling approvals was partially reversed in December; although clearly approvals are well past their peak.
In trend terms, approvals peaked in April 2015 and have since fallen by 7.7%:
Approvals have also begun to fall in rolling annual terms:
Nevertheless, there were still 232,075 approvals in the 2015 calendar year – only a fraction below the peak of 233,982 approvals in the year to October 2015, with most of this growth in approvals coming from units and apartments, which are running at more than twice the 30-year average.
The below chart shows the time-series of approvals at the state level on a trend basis:
As you can see, all states except Queensland, look to be well past their peak.
From the second chart above, and assuming a 12-18 month lag between approvals and completions, it still looks like the dwelling construction boom will begin to unwind in the second half of this year, just as the mining investment cliff intensifies and the car industry begins to shut down.
