Australian dwelling approvals were near flat in April (13.1k) around broadly movements in house (-1%) and unit approvals (1.1%). Headline approvals remain around 12-year lows as higher interest rates and capacity pressures as well as other headwinds continue to impact the home building sector.
Approvals eased by a modest 0.3% in April to 13.1k following a 2.7% rise in March (revised up from 1.9%). For the 3 months to April, approvals averaged 13k - a level on the lows for the cycle and weak in a historical context for Australia. This comes amid the well-documented surge in the population post the pandemic. However, the pipeline of dwellings under construction continues to remain very elevated; according to the ABS, at the end of 2023, there were 89.5k detached homes and 135.1k units under construction. Supply constraints have been a key factor leading to delays in the construction of these dwellings.
House approvals declined by 1% in the month to 9k but are up by a little more than 9% over the past year. The strongest increases in house approvals through the past 12 months have come in the states of Western Australia (44.9%) and Victoria (16.4%).
Unit or higher-density approvals were up by 1.1% in April to 4.1k, a decline of 7.5% on 12 months ago. Looking at the recent trends, the high-rise segment has been the main source of weakness, but townhouses have started to pick up.
The value of alteration work approved firmed slightly in the month (0.4%) to $1.1bn. The elevated level of alteration approvals largely reflects inflationary effects; yesterday's construction activity data (see here) reported that the volume of alteration work completed has fallen back sharply to late 2020 levels.
