Building Approvals — July | By the numbers
- Dwelling approvals (seasonally adjusted, including the private and public sectors) lifted off their lowest level in 8 years advancing by 12.0% in July to 13,840. The median estimate was for a 2.0% decline following on from the 4.9% fall in June.
- Growth in approvals through the year turned positive to 6.3% from -14.8%.
- Unit approvals led the way rising by 20.1% in the month to 4,888, with the annual pace swinging from -29.1% to 8.4%.
- House approvals surged up by 8.0% in July for their strongest monthly rise in 6½ years to 8,952, lifting annual growth to 5.3% from -5.4%.
Building Approvals — July | The details
After the onset of the pandemic accentuated a well-established period of weakness, dwelling approvals rebounded by 12.0% in July, helped by improved sentiment as the economy started to reopen and possibly with some support from the announcement effect of the Federal Government's HomeBuilder scheme. Notwithstanding this, the upside result in July followed a 21% contraction in approvals through the first half of the year. Both the headline and underlying detail pointed to broad-based support across houses and unit categories in July.
The value of alteration work approved to existing residential properties weakened by 1.1% in July to $0.715bn to be down by 1.3% over the year but this is well up from the lows through the shutdown. Meanwhile, non-residential approvals largely retracted a sharp rebound in June to fall by 19.8% this month to $3.3bn, which is vastly weaker than the level from a year earlier (-15.7%yr).
Details across the states were mixed as rebounds came through in New South Wales (+32.0%), Victoria (+9.3%), Queensland (+7.7%) and Tasmania (+50.0%) as weakness persisted in South Australia (-10.5%) and Western Australia (-8.3%).
Building Approvals — July | Insights
Dwelling approvals appear to be another that can be added to the list of indicators that have shown a sharp rebound coming out of the national shutdown. There remains considerable uncertainty around the outlook for the residential construction sector amid weak economic conditions and the impact of border restrictions limiting population growth. On the positive side will be the support from the Federal Government's HomeBuilder scheme that offers to provide qualifying owner-occupiers with grants of $25k to build a new home or substantially renovate an existing home.
Dwelling approvals appear to be another that can be added to the list of indicators that have shown a sharp rebound coming out of the national shutdown. There remains considerable uncertainty around the outlook for the residential construction sector amid weak economic conditions and the impact of border restrictions limiting population growth. On the positive side will be the support from the Federal Government's HomeBuilder scheme that offers to provide qualifying owner-occupiers with grants of $25k to build a new home or substantially renovate an existing home.