Australian dwelling approvals opened the year with a 1% decline in January, remaining around cycle lows. This comes after annual approvals fell to an 11-year low in 2023. Volatile unit approvals rose sharply in the month (14.5%), but this was more than offset by a slide in house (detached) approvals (-9.6%) to mid-2012 levels.
Weakness in house approvals drove dwelling approvals to a 1% decline in January, coming in around 12.9k. This was the third consecutive decline in house approvals, with the current level (7.6k) at its lowest since mid-2012 and around 47% below the cycle peak in early 2021. The combined effects of the withdrawal of construction subsidies, higher interest rates, supply constraints and weak sentiment have all been contributing factors behind the slide.
Approvals in the unit segment, volatile month to month, rose 14.5% to 5.3k in January following a 22% fall in December. On a 3-month average basis, approvals in the segment sit just above cycle lows. The underlying detail indicates that high-rise and townhouse approvals have declined to very low levels.
