Australian building approvals came in solid in November, following a drop in October and solid growth in September. A huge spike in NSW unit approvals led to the rebound in November.
Residential building approvals rose 11.1 percent sequentially in November, following a revised 7.9 percent fall in October. Unit approvals rose sharply while house approvals recorded a more modest rebound.
NSW unit approvals more than doubled in November, rising 119.9 percent sequential growth. Unit approvals in VIC, QLD and WA fell, while South Australia recorded a 50.5 percent uplift on a month-on-month basis. House approvals recorded solid growth in Victoria and more modest growth in Queensland and ACT.
NSW unit approvals rose 48.8 percent year-on-year, leading to a total approvals growth of 7.1 percent year-on-year in NSW. This is the first time since May 2018 that NSW has seen positive annual growth. Victorian approvals are still a bit negative in annual terms, but this was the smallest negative result in 2019.
Non-residential approvals are trending downward. The value of non-residential approvals fell sharply in November and annual growth in non-residential approvals is now at its third-lowest result in the last three years.
“While the surge in NSW approvals is unlikely to be repeated, we think that a turn in approvals is likely to occur sometime in 2020. In contrast, the downturn in non-residential approvals is a concern”, said ANZ in a research report.
