Building Approvals — July | By the numbers
- Total Dwelling Approvals fell -5.2%m/m to 18,185 vs market expectations for a fall of -2%. Approvals in June were revised up to +6.8%m/m from +6.4%.
- House Approvals fell -2.8%m/m to 9,845. Growth in June was lowered to +3.8% from +4.4%.
- Unit Approvals fell -7.8%m/m to 8,340. Approvals last month were revised to +10.4% from the initial estimate of +8.9%.
Building Approvals — July | The details
Despite a spike in June the momentum in building approvals continues to tilt lower, with July's result showing declines on both a seasonally adjusted (-5.2%m/m) and trend (-1.3%m/m) basis. On an annual basis, building approvals turned negative on both measures for the first time since August 2017; -5.6% (sa) and -2.5% (trend).
The weakness was broad-based in July; houses -2.8%m/m (trend -1.1%) and -3.5%Y/Y (trend -0.8%), units -7.8%m/m (trend -1.6%) and -8.0%Y/Y (trend -4.5%).
Looking at the state detail, declines of a similar magnitude were recorded in the month for the three largest states; New South Wales (houses +0.8%, units -3.2%), Victoria (houses -2.4%, units -7.0%) and Queensland (houses -12.1%, units flat). The more severe declines in South Australia and Western Australia were impacted by a sharp drop in capital city unit approvals. Strengthening house approvals drove the result in Tasmania.
State
|
July (m/m)
|
Annual (Y/Y)
|
NSW
|
-5.2%
|
-20.3%
|
VIC
|
-4.6%
|
-8.4%
|
QLD
|
-6.0%
|
+7.1%
|
SA
|
-26.5%
|
-9.1%
|
WA
|
-14.7%
|
-19.4%
|
TAS
|
+13.6%
|
+63.7%
|
AUS
|
-5.2%
|
-5.6%
|
Based on ABS 8,731.0
The ABS reported that the value of non-residential building approved jumped by 31.5% in June, while the value of alterations and additions lifted 6.3%.
Building Approvals — July | Insights
Slowing momentum in building approvals presages a softening in residential construction activity, which would be in-line with the weakening seen in related data for housing finance and property prices. The near-term outlook is, however, supported by an elevated pipeline of work already under construction — particularly from units in Sydney and Melbourne.
