Building Approvals — April | By the numbers
- Dwelling approvals (private and public sectors) in seasonally adjusted terms declined by 1.8% in April to 15,294, whereas a much more significant contraction of 10.7% had been anticipated. Approvals were revised to show a smaller fall of 2.6% in March from the -4.0% result initially reported.
- In annual terms, approvals advanced from 1.9% (revised from 0.2%) to 5.7% driven by base effects.
- House approvals lifted by 3.0% in April to 9,042, driving annual growth from -1.1% (revised from -2.1%) to 5.8%.
- Unit approvals pulled back by 8.1% in the month to 6,252 as growth over the year was little changed at 5.6% compared to 5.9% in March.
Building Approvals — April | The details
A very sharp fall of almost 11% in total dwelling approvals was expected to come through in April, though in the event the contraction was modest at -1.8%. The impact of the COVID-19 pandemic on approvals may not become evident for a few months as the ABS noted the lag that occurs between when plans are submitted and approval is granted. The sector will also be trying to gauge population growth dynamics with the outlook for overseas migration very uncertain at the moment, as well as what the shock incurred by the labour market will mean for housing demand. House approvals increased by 3.0%mth — its strongest rise since last November — while the annual pace at 5.8% increased to its fastest in 2 years. Around significant month to month volatility, unit approvals have fallen by around 7.4% in year to date terms.
The value of alteration work approved in April rolled over by 13.2% to $620.4m to be down by 12.6% over the year. Non-residential work approved continued its weak run so far in 2020 falling by a further 11.9% to $3.56bn — its weakest level since December 2018.
Looking across the states, it becomes clear that the national result in April (-1.8%) was driven by a sharp decline from New South Wales (-29.9%). Approvals advanced across the other states, with Victoria +5.7%, Queensland +4.6%, South Australia +21.0%, Western Australia +12.4%, while Tasmania was flat.
The value of alteration work approved in April rolled over by 13.2% to $620.4m to be down by 12.6% over the year. Non-residential work approved continued its weak run so far in 2020 falling by a further 11.9% to $3.56bn — its weakest level since December 2018.
Building Approvals — April | Insights
April's report appeared to be largely unaffected by the COVID-19 pandemic, with the impact on dwelling approvals likely to take a little while to come through in the statistics. The March quarter national accounts highlighted that the residential construction cycle was mired in its deepest downturn in 7 years and the pandemic is likely to extend this weakness throughout the remainder of 2020.
April's report appeared to be largely unaffected by the COVID-19 pandemic, with the impact on dwelling approvals likely to take a little while to come through in the statistics. The March quarter national accounts highlighted that the residential construction cycle was mired in its deepest downturn in 7 years and the pandemic is likely to extend this weakness throughout the remainder of 2020.