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Overall building approval figures have regained strength following a sharp fall, but housing construction has clearly passed its peak, according to a leading economist.
Australian building approvals rose by 4.2 per cent in July after a 5.2 per cent fall in June.
The latest building approvals figures from the Australian Bureau of Statistics, released yesterday, show the seasonally adjusted estimate for private sector dwellings – excluding houses – rose 6.1 per cent in July following a fall of 14.1 per cent in June.
Meanwhile, the seasonally adjusted estimate for private sector houses fell 3 per cent in July following a rise of 3.7 per cent in June.
The seasonally adjusted estimate of the value of total buildings approved rose 7.8 per cent in July after a fall of 2.9 per cent in June. The value of residential buildings approved rose 5.9 per cent following a fall of 5.8 per cent in June. The value of non-residential buildings approved rose 12.2 per cent, and has risen for the past three months.
Westpac senior economist Matthew Hassan said a partial rebound was widely recovered after last month's report showed a sharp fall in high rise approvals driving an 8.2 per cent drop overall.
“That previous fall has been pared back to just 5.2 per cent, meaning approvals are only down 1.2 per cent over the two months combined and 4.7 per cent below their March peak,” Mr Hassan said.
“Volatility continues to affect much of the survey detail, making trends difficult to pinpoint.”
The state breakdown shows the rebound was concentrated in NSW, which saw a 27 per cent jump in the month. Victorian approvals rose 8.3 per cent with other states recording declines – notably, approvals in WA are now down 30 per cent for the year.
“Stepping back from the month-to-month variations, approvals have clearly passed their peak – but the degree to which conditions are now softening remains unclear,” Mr Hassan concluded.