Australia

Dwelling approvals down by 8.2 per cent in June

AFTER a revised increase of 2.3 per cent in May, the number of new dwellings approved in June decreased by 8.2 per cent, in seasonally adjusted terms, according to the latest figures released last week by the Australian Bureau of Statistics (ABS).

A total of 17,868 dwellings were approved in June, compared to seasonally adjusted totals of 19,458 in May and 19,025 in April. When compared to the same month last year, the number of dwellings approved in June 2015 was up by 8.6 per cent, in seasonally adjusted terms.

New House
Above: New House / by Alexander Kesselaar.

In seasonally adjusted terms, dwelling approvals for the month of June only increased in Queensland (up 16.3 per cent to 4,029 dwellings) and South Australia (up 10.4 per cent to 837).

Dwelling approvals decreased in Tasmania (down 7.2 per cent to 243 dwellings), New South Wales (down 9.6 per cent to 4,840), Western Australia (down 13.2 per cent to 2,350) and Victoria (down 23.9 per cent to 4,908), in seasonally adjusted terms.

In seasonally adjusted terms, 9,661 private sector houses were approved in June, compared to 9,264 in May. A total of 7,887 private sector dwellings excluding houses were approved in June, which was a 20.4 per cent decrease when compared to May's result of 9,907.

The seasonally adjusted estimate of the value of total building approved fell 5.3 per cent in June following a rise of 2.0 per cent in the previous month. The value of residential building fell 8.8 per cent following a rise of 3.1 per cent in the previous month. The value of non-residential building rose 3.9 per cent after falling for two months.

The Housing Industry Association (HIA) said the decline in dwelling approvals was driven by falls in non-detached housing approvals, with approvals for detached housing continuing an 18- month trend of relatively strong and steady levels.

"It certainly looks like this segment of approvals [for non-detached houses] has peaked, with each of the last three months of activity falling well short of the record-high level reached in March this year," said HIA Economist, Diwa Hopkins.

"In contrast, detached house approvals have been tracking fairly steadily at relatively strong levels for the past 18 months. Approvals in this segment of the market have maintained an average of 9,650 per month since January 2014. The last time such levels were similarly maintained was over a decade ago," Ms Hopkins said.

"Approvals activity is shaping up to be consistent with our broader expectations of the actual new home construction cycle. While new home building has likely already peaked, we expect it will remain at a very high level in the 2015-16 financial year.

"In particular, we are forecasting the approaching down cycle to new home building to be considerably smaller for detached houses than for non-detached houses."

More information is available from the Australian Bureau of Statistics website at <http://www.abs.gov.au/>.

Photo: 'New House Lock Up HDR' / Alexander Kesselaar / Licensed under Creative Commons BY-NC-ND 2.0.

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