Housing downturn loses momentum as good news rolls in: HIA

The decline in dwelling approvals appears to be losing momentum, the HIA chief economist Tim Reardon advised after the latest Australian Bureau of Statistics release of its monthly building approvals data covering all states and territories.

Approvals in May 2019 were up by 0.7% from the previous month.

The improvement was led by multi-unit approvals (+2.1%) with detached house approvals down marginally (-0.2%), noted Reardon.

"Recent positive news relating to house prices and new home sales has started filtering through," he said.

"Even if this isn’t the bottom of the cycle the pick-up in new home sales in May suggests the pace of decline is slowing.

"We’re hopeful market confidence has improved following the Federal election and retention of current property taxation arrangements.

"Back-to-back interest rate cuts from the RBA and the pending reforms to APRA’s mortgage lending guidelines should act to minimise any further contraction in residential building."

Seasonally adjusted building approvals in May 2019 were up by 14.4% in Victoria and were flat in NSW.

Approvals declined in Tasmania (-1.2%), South Australia (-2.9%), Western Australia (-4.7%) and Queensland (-6.3%).

In trend terms, approvals in May lifted by 7.2% in the ACT and were down by 6.1% in the Northern Territory.

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Source: HIA