Dwelling approvals post strong rebound

The Australian Bureau of Statistics (ABS) has released dwelling approvals data for the month of November. At the national level, the number of dwelling approvals surged by a seasonally adjusted 11.8% to 14,675. The overall lift in approvals was broad-based, with both units & apartments (+22.6%) and houses (+6.1%) rising.

However, in the year to November 2019, dwelling approvals fell a seasonally-adjusted 3.8%, with house approvals down 9.9% and unit approvals down by 5.5%:

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:

Dwelling approvals have crashed in trend terms, driven by units & apartments; albeit are showing some faint signs of life across the apartment segment:

Since initially peaking in March 2015, dwelling approvals nationally are down by 32% in trend terms.

Approvals have also fallen fast in rolling annual terms:

There were 172,623 approvals in the year to November 2019 – way below the peak of 242,162 approvals in the year to August 2016 – with most of this growth in approvals coming from units and apartments, which are still running well above the 30-year average, whereas house approvals are now running below average.

The below chart shows the time-series of approvals at the state level on a trend basis, with massive busts recorded across the major markets; albeit with modest rebounds recorded in VIC and NSW:

Despite this month’s rebound, the dwelling construction bust rolls on.

Leith van Onselen

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