Warmer building data masks overall colder front

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Total building approvals increased in March, figures from the ABS revealed yesterday, but the underlying result remained concerning, according to the Housing Industry Association.

Total residential building approvals rose 9.1 per cent in March although they were down 8.9 per cent for the quarter.

“Today’s numbers are driven by a significant rise in approvals in the highly volatile private sector other dwellings segment, which were up by 26.1 per cent in March. However, detached dwelling approvals went backwards, falling by 1.3 per cent in the month,” said HIA senior economist Andrew Harvey.

“Although detached housing approvals have fallen again, it is good to see at least some positive news in the apartment sector. Nevertheless, we are conscious that the March increase inapprovals follows two months of double-digit falls,” said Mr Harvey.

“Furthermore, it is unclear as to what extent we will see these other dwelling approvals flowthrough to building starts. With ongoing tight credit conditions and stagnant residential prices thereis a real risk that even though approved, a larger number than usual of these projects may not proceed."

The jurisdictions also failed to rise in tandem, with some states rebounding better than others, Mr Harvey said.

“In terms of the jurisdictions much of the March increase is due to a 26.8 per cent increase in Victorian approvals, which have rebounded after large falls in January and February.

“However, it is disappointing to see that Queensland’s approvals continue to fall, reaffirming the SunshineSunshine, NSW Sunshine, VIC State’s position as the weakest residential building market in Australia,” said Mr Harvey.

In addition to the 26.8 per cent rise in Victorian approvals increases were also experienced in New South Wales, Western Australia and Tasmania.

Queensland and South Australia were the only two states to see a decline in approvals over the month.

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Warmer building data masks overall colder front
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