Housing approvals fall in Victoria and NSW: ABS

New housing approvals in NSW and Victoria fell sharply in August, but Queensland recorded a jump in approvals, according to the Australian Bureau of Statistics.

Housing approvals in Victoria fell by almost 10% in August on a seasonally adjusted basis, according to the latest ABS data.

New South Wales was the other major market to record a significant fall over the month, with building approvals for houses falling 4.3%.

For the 12 months to August 2011, the total number of private-sector housing approvals is down 9.5%

The 1% drop in residential approvals in August followed a small rise of 0.2% in July.

As expected following the introduction of the Queensland Building Boost Grant available from the August 1, Queensland recorded a 16% increase in housing approvals while Western Australia managed a modest 1.6% increase.

The drop in private sector housing approvals was offset by a big jump in unit approvals.

Excluding houses, seasonally adjusted estimates for dwellings rose 35.1% in August following a rise of 0.4% last month.

Westpac senior market strategist Damien McColough says unit approvals are less of an indicator of the near-term trend of the housing sector.

Overall, private-sector dwelling approvals (units and houses) increased by 11.4% in August following a rise of 1.8% in the previous month.

For the 12 months to August 2011, residential building approvals are down 5.5%.

Helen Kevans, an economist at JP Morgan, says the overall improvement in approvals should not have much of an impact on the RBA’s interest rate outlook as its focus is on Europe and global economic issues.

"I think the RBA is focusing on what is happening offshore and what is happening in financial markets and, in particular, funding markets," she says.