Building approvals surged in July something of a surprise at the start of the new financial year, jumping 12% with solid rises from private and non-private dwellings.
The sharp rise in the data from the Australian Bureau of Statistics (ABS) was very different to the sharp falls seen in June when approvals fell to an 8 year low.
In fact so strong was the rise that growth in the year to July moved back into positive territory after the big falls in the year to June (which was 2019-20).
But it is likely July saw a lot of approvals processed and given a tick after they missed deadlines in June or councils were slow to issue their approvals.
It is quite possible August will see a return to the weakness seen in June.
“The rise was driven by private sector dwellings excluding houses, which increased by 22.7 percent in July, after falling to an eight-year low in June,” said Daniel Rossi, the Director of Construction Statistics at the ABS.
“Meanwhile, private sector houses rose by 8.5 percent, which was the strongest monthly increase since January 2014.”
“The July results likely reflect improved consumer sentiment in May, on the back of falling COVID-19 cases and easing of restrictions.”
However, the value of total buildings approved fell 3.9% over the month, and non-residential building total value fell 19.8% – its lowest level since January 2018.
Tasmania made the strongest gains with dwelling approvals rising 50%, while approvals in NSW surged 32%.
Victoria’s approvals rose 9.3% and Queensland’s lifted by 7.7%.
South Australia and Western Australia both recorded falls, down 10.5% and 8.3% respectively.
Meanwhile, the CoreLogic Home Value Index of national home prices fell for the fourth successive, down 0.4% in August but still up 5.8% over the past year.
Melbourne suffered the biggest fall in house prices in August of any major capital city. The data showed a 1.4% drop. Melbourne house prices also fell 4% the last three months and are now down 2.5% year to date.
By way of contrast, Sydney house prices eased by just half a percent last month and are down 2.4% in the last three months but still up 1.7% over the year.
