Australian dwelling approvals eased from a near 2-year high in November after declining by 3.6% month-on-month (vs -1.0% expected). Approvals trended higher through 2024 but remain at low levels reflecting the impacts of higher interest rates and capacity pressures in the home building sector. The house or detached segment has driven the uptrend in approvals; however, house approvals saw back-to-back declines for the first time since early-mid 2023. A 5.6% decline in unit or higher-density approvals also contributed to the fall in headline approvals.
Headline dwelling approvals fell by 3.6% in November as approvals declined in both the house (-2.2%) and unit segments (-5.6%). Approvals were coming off strong gains in September (5.4%) and October (5.2%). For the 3 months through November, approvals averaged 15.1k - a high back to December 2022, and 16.4% above the cycle low from March 2023 (13k).
House approvals fell 2.2% in the latest month following a 3.8% fall in October, their first back-to-back declines in nearly 18 months. The state level data indicates the declines have been broad based across the nation.
In the alterations segment, the value of work approved remained elevated near the end of 2024 at $1.1bn. Although the volume of alteration work being done has been retracing from the highs associated with the HomeBuilder stimulus during the pandemic, cost increases have kept the value of alteration approvals high.
Using 3-month averages to smooth the volatility, higher-density approvals - notwithstanding November's decline - have shown some encouraging signs. This has come mainly off the back of an uptick in high-rise approvals.
