Signs from the June and year to June home building approvals yesterday that the downturn is bottoming out.
But we can’t ignore a possible bunching effect past the end of the financial year and that may have seen local governments push through approvals that had been previously delayed.
The ABS said that in original terms a total of 219,256 approvals were issued in 2016-17 – down nearly 8% from 2015-16’s 238,256 and well under the 230,0849 in 2014-15.
Private dwelling approvals fell nearly 5% in the year to June to total 112,917 (from 118,770), while non private dwelling approvals dropped 4.4% to total 114,841.
Dwelling units approved / Private sector houses approved – Source: ABS
The shape of the trend and seasonally adjusted graphs clearly show both measures bottoming out in 2017 with a small pick up now evident in the trend graph for private houses, and becoming evident in the seasonally adjusted graph line.
The graphs for total dwellings show the start of a bottoming out in the trend line, while the seasonally adjusted line remains volatile.
In June building approvals fell 2.3%, year on year (according to the ABS), with improving from of May’s 18.7% slide and a forecast of 11%.
But whatever the reason approvals rose at the fastest pace in eleven months in June, driven by a more than a 20% jump in apartments (which are the most volatile part of the series).
Growth in total building approvals rose 10.9% month on month in June seasonally adjusted as a result, recovering from a larger than expected 5.4% drop in May, according to figures from the Australian Bureau of Statistics. That was well above the forecast for a small rise of just 1.5% in the month.
Private dwelling approvals rose 3.4% seasonally adjusted in June to be 1.4% above June 2016. Non private swellings were down 2.3% year on year.
The ABS said the growth was “driven by a rise in total dwellings excluding houses” – that is, apartments – of 20.1 per cent month on month. The number of dwelling approvals rose in the Australian Capital Territory, South Australia, Western Australia, Queensland and Tasmania, but fell in Victoria and the Northern Territory and were flat in New South Wales.
According to the ABS report the value of total building approved rose 1.3% in June, in trend terms, and has risen for five months. The value of non-residential building rose 3.4% while residential building fell 0.1%.
In the less volatile trend terms, the ABS said the number of dwellings approved rose 0.1% after falling for three months. Total approvals were down 14.9% year on year, with private dwellings down 2.8% and apartments etc off 26.2%
"Dwelling approvals have been relatively stable in trend terms over the first six months of the year, after falling from record highs in mid-2016," said Daniel Rossi, Director of Construction Statistics at the ABS. "The June 2017 data showed that the number of dwellings approved is now 15 per cent below the peak in May 2016".
"In trend terms, approvals for private sector houses rose 0.8 per cent in June. Private sector house approvals rose in Queensland (1.8 per cent), New South Wales (1.1 per cent) and Victoria (0.5 per cent), but fell in Western Australia (0.6 per cent) and South Australia (0.1 per cent).”
