Australian building approvals rebound in January on rise in unit approvals, overall trend remains soft

Australian building approvals rebounded in the month of January, after it dropped sharply in the preceding months. Residential building approvals rose 2.5 percent sequentially in January after falling 8.1 percent in the prior month. The recovery in the headline index was led by a 3.8 percent rise in unit approvals from a decline of 18.7 percent, while house approvals were up 1.9 percent. The trend in approvals continues to be weak though, with approvals declining 3.2 percent sequentially in trend terms and 28.6 percent year-on-year, noted ANZ in a research report.

Throughout states, NSW recorded a strong recovery in approvals, with the total number rising 12 percent sequentially, led by a rise of 18 percent in unit approvals, detached house approvals rose 7 percent. Victoria continues to record falling approvals, dropping 8 percent in January as both units and houses recorded falls of 22 percent and 2 percent, respectively. Western Australia recorded the fastest rise in approvals, rising 29 percent sequentially, as unit approvals rose sharply by 184 percent, while house approvals were up 3 percent.

Total approvals in Queensland dropped for the seventh consecutive month, falling 4 percent as units dropped 8 percent and houses fell 2 percent. South Australia’s total approvals dropped 2 percent as a 4 percent rise in houses was countered by a 20 percent decline in units.

The value of non-residential approvals was up 6.4 percent sequentially, after the 9.8 percent fall in December. On a year-on-year basis, non-residential approvals dropped 8.9 percent. The national fall was led by a fall of 18.8 percent in NSW and a 3.6 percent decline in Victoria, in trend terms.

“The overall trend in approvals remains soft, but it is slightly encouraging that the pace of declines at the end of 2018 hasn’t continued”, added ANZ.

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