The Australian Bureau of Statistics (ABS) has released dwelling approvals data for the month of January. At the national level, the number of dwelling approvals fell by a seasonally adjusted 7.5% to 17,446. The overall decline was broad-based, with both detached houses (-6.0%) and the volatile unit and apartment segment (-10.8%) registering sharp falls.
In the year to January 2016, dwelling approvals fell by a seasonally-adjusted 15.5%, driven mostly by falling unit approvals (-26.7%), although detached houses (-3.3%) also fell:
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, dwelling approvals are clearly well past their peak.
In trend terms, approvals peaked in March 2015 and have since fallen by 12.4%:
Approvals have also begun to fall in rolling annual terms:
Nevertheless, there were still 231,751 approvals in the year to January 2016 – only a fraction below the peak of 237,241 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 appear to be past their peak, with approvals in NSW and WA coming off particularly fast.
From the second chart above, and assuming an 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.
