Building Approvals — October | By the numbers
- Total dwelling approvals (including the private and public sectors) on a seasonally adjusted basis fell by 8.1% in October to 13,049, which was much greater than the 1.0% fall anticipated by markets. In the previous month, approvals increased by 7.2%.
- Approvals over the year extended to a 23.6% decline from -17.0% in the previous month.
- Unit approvals slumped by 10.0% in the month to 5,067 following a 12.9% rise in September. The pace of decline over the past year increased from -24.3% to -30.0%.
- House approvals fell by 6.8% in the October (prior rev: +3.9%) to 7,982 to be down by 18.9% through the year (prior rev -11.3%).
- On a trend basis, total dwelling approvals fell by 0.8% in October to be down by 18.2% year-on-year, with houses -0.8%m/m and -15.0%Y/Y and units -0.7%m/m and -23.0%Y/Y.
Building Approvals — October | The details
Dwelling approvals remain around their lowest levels in around 6½ years following weak outcomes for houses and units in October. House approvals fell below the 8,000 level for the first time since early 2013 and have declined by almost 19% over the past 12 months. Unit approvals remain in a sharp downtrend and are currently down by 30.0% over the year. This has largely been driven by ongoing weakness in the high-rise segment, however; as the chart (below) shows, both the low-rise and townhouse segments have also weakened over the past year.
The value of non-residential work approved in October lifted by 4.2% in October to $4.2bn and is strongly higher over the year at +17.7%. Meanwhile, the value of alteration work approved to existing residential properties weakened by 2.6% in October to $697.7m but is broadly flat at 0.5% in year-on-year terms.
Building Approvals — October | Insights
Today's report was a disappointingly weak update considering that dwelling approvals had lifted in the previous two months by 2.2% in August and 7.2% in September. October's 8.1% fall largely unwound those gains and was broadly based across houses and units. As such, the outlook for residential construction work remains weak and is likely to drag on economic growth throughout 2020.