Australian dwelling approvals fell by a further 1.9% in February (vs -3% exp) to their lowest level (12.5k) since the start of 2023. Approvals in the unit segment slumped nearly 21% to reach a new cycle low; however, house approvals were reported to have risen at their fastest pace in 24 months (10.5%), rebounding from a large fall in January (-9.5%). Seasonality during the early part of the year appears to have increased the volatility in the series.
Headline approvals were down 1.9% in February following declines in January (-2.5%) and December (-10.5%). As alluded to above, seasonal effects appear to have induced additional volatility in the data, but the trend remains unequivocally weak reflecting the headwinds of higher interest rates and capacity pressures in the construction sector. Approvals averaged around 12.8k per month for the 3 months through February, their lowest since mid-2012.
After hitting a 12-year low in January, house approvals rebounded strongly in February (10.5%), returning to their level at the end of 2023. The sharpest rises came through in Western Australia (19.5%), New South Wales (16.3%) and Victoria (13%). However, house approvals remain at low levels - nationally and across the states.
In the unit segment, approvals fell by 20.8% in February. This saw the monthly total (4k) falling to a new cycle low, while the 3-month average has slowed to levels last seen in 2012. Much of the weakness in the segment is in the high-rise space, but in recent months townhouse approvals have also fallen.
