Building approvals up 3.1% in February a "material improvement": HIA

The number of dwellings approved for construction rose 3.1% in February in seasonally adjusted terms, after falling for two months, the latest ABS data shows.

This follows a 2% fall in January (upwardly revised from a 2.4% decrease).

Approvals are up 12.8% over the year.

“We have seen indicators of consumer sentiment improve over recent months and we may well be seeing an early sign that this is flowing through to activity on the ground. After two consecutive months where approval numbers slipped back it is pleasing to see a material improvement in February,” said HIA economist, Geordan Murray.

Master Builders Australia chief economist Peter Jones welcomed the improvement in February but expressed concern that a negative trend has developed. 

“Despite the improvement in the seasonally adjusted figures that were buoyed by an unusually high public sector housing figure, a negative trend has emerged in the ‘other’ dwellings sector (units and apartments). 

“The overall negative trend in approvals is very worrying for builders. Despite green shoots and early signs of a recovery, momentum has failed to build," he said.

Dwelling approvals increased in February in South Australia (23%), Western Australia (5.3%), Queensland (3.8%) and Victoria (0.3%) but decreased in New South Wales (-7.7%) and Tasmania (-5.8%) in seasonally adjusted terms.

In seasonally adjusted terms, approvals for private sector houses rose 0.5% in February.

However, ANZ also noted the increase was dominated by strong growth in public sector detached house approvals, while private sector building approvals remained subdued (+0.9% month on month).

Private sector house approvals rose in South Australia (9.9%), New South Wales (7.8%) and Victoria (6.3%) but fell in Queensland (-7.7%) and Western Australia (-6.4%).

The value of total building approved fell 3.1% in February, in seasonally adjusted terms, following a rise of 7% in the previous month.

The value of residential building rose 2.5% while non-residential building fell 11%.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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