Dwelling approvals rise 7.8% in September and dampen Melbourne Cup cash rate cut prospects

A second consecutive monthly rise in dwelling approvals in September has further dampened expectations of a rate cut on Melbourne Cup day.

The number of dwellings approved for construction rose 7.8% to 13,338 in September 2012 in seasonally adjusted terms, according to the latest ABS data.

This was the second consecutive month they have risen following a 6.4% rise in August. Dwelling approvals fell 21.2% in July.

Dwelling approvals are a leading future indicator of housing activity and the increases in August and September will raise RBA concerns about low interest rates creating a housing bubble.

Approvals for private sector houses rose 1.2% in September to 7,484 led by Western Australia (4.7%), Victoria (3.3%), South Australia (1.7%) and New South Wales (1.3%).

However they fell in Queensland (-3.6%).

Over the year to September, approvals for houses are down 1.8%.

Unit approvals increased by 17.9% in September to 5,772.

The value of total building approved rose 3.2% in September, in seasonally adjusted terms, and has risen for 2 months.

The value of residential building rose 12.5% while non-residential building fell 12.3%.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

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