Varied outlook on home approvals front
Perhaps offering some hope on the home construction front, private sector housing approvals picked up in NSW and Victoria over July, according today’s ABS data.
On a seasonally adjusted basis, NSW registered a 4.6% improvement, while Victoria recorded an 8.7% uptick.
The worst-performing state was Queensland, where housing approvals declined 14.5% over the month.
Nationally, private sector housing approvals fell 0.2% in July, are down 4.1% for the July quarter and down 13.1% over the last 12 months.
Westpac called the Queensland result “disconcertingly large” and commented that the state still showing no signs of a rebounding.
The HIA described the 1% increase in seasonally adjusted building approvals over July as “modest” result, noting that they are down by 6.4% over the three month period.
NSW was the only state to record an improvement in total dwelling approvals – up 5.4% in July, with Victoria down 3.1%.
Nationally, the estimate for private sector housing approvals fell 0.2% in July 2011 following a fall of 3.3% in the previous month while the value of total residential building fell 1.2% and the value of non-residential building fell 9.7%
Westpac described the small drop in private sector houses in July as a “reassuring result, suggesting the 3.3% fall in Jun is not necessarily the beginning of another significant re-weakening”.
However, it warns that the 1.4% decline in private sector units approvals is a further sign that this sector is “experiencing a lagged downturn that may still have some way to run”.
HIA’s senior economist Andrew Harvey noted the 0.1% decline in total detached houses (both private and non-private) over the month, which he said “further highlights the weakness within the new home building industry at this point in time”.
“Twelve months of trend decline in approvals in part reflects the weak business and consumer sentiment that exists in the non-resource economy at the moment,” he says.
