The Australian Bureau of Statistics (ABS) has released dwelling approvals data for the month of December. At the national level, the number of dwelling approvals fell by a seasonally adjusted 2.9% to 16,141. The overall fall was driven by falls in both detached house approvals (-3.4%) and the volatile unit & apartments segment (-1.2%). The result disappointed analyst’s expectations, who had expected a total fall in approvals of 0.5% over the month.
In the year to December 2013, dwelling approvals rose by a seasonally-adjusted 21.8%, driven by big lifts in both unit & apartment approvals (+29.3%) and house approvals (+17.8%):
A chart showing the time series of seasonally-adjusted dwelling approvals at the national level is provided below, split-out by detached houses and units & apartments:
As you can see, dwelling approvals nationally continue to trend up after bottoming in late-2011. This recovery has been driven mostly by a pick-up in unit & apartment approvals (although they remain volatile), although house approvals have also picked-up (although they remain weak overall).
In annual terms, dwelling approvals are still running above their long-term average levels, as shown by the below chart, with weakness in detached house approvals more than offset by strength in unit & apartment approvals. However, as noted previously, approvals still remain highly depressed in population-adjusted terms, given that Australia’s population has grown by around 45% over the past 30-years.
The below chart shows the time-series of approvals at the state level:
This month’s fall in approvals was driven by Victoria and Queensland, where approvals fell by 5% over the month in both states. These falls were partly offset by New South Wales, where approvals rose by 4%.
The same data is shown below on a 3-month moving average basis, in order to smooth volatility. As you can see, dwelling approvals remain in an uptrend in all mainland states except Victoria, which looks to be trending sideways after a short-term bounce following recent changes to the first home buyers grant favouring new dwellings:
Overall, the trend suggests the uplift in approvals and construction continues at a decent pace, but with the less labour intensive apartments segment far ahead of houses and huge doubts remaining over whether the RBA’s plan for housing to fill the void left as the mining boom unwinds will be fulfilled.
