Australian housing approvals rose sharply in the month of September after a surge in approvals for units and decent rise for houses.
Residential building approvals rose 7.6 percent sequentially in the month, following a revised 0.6 percent fall in the prior month. Apartment approvals rose sharply by 16.1 percent following August’s modest rise of 1.8 percent. House approvals were up 2.7 percent. However, approvals are 19 percent lower than one year ago.
The headline figure of approvals was mainly driven by unit approvals that rose 53.3 percent in QLD, 85 percent in SA and 523 percent in the ACT. Outside of this, there was not much strength except for Western Australia’s housing approvals that rose 6.6 percent sequentially in September.
The October approvals are likely to have a reasonable chance for another rise, driven by some large apartment block approvals in Sydney, noted ANZ in a research report. Nevertheless, the pipeline of activity elsewhere is diminishing.
“Although we expect to see broad improvement in approvals over the coming months, given approvals are still down 19 percent for the year, construction is likely to remain weak for some time. We think we are at or close to the turning point in approvals, which matters for our expectation of a recovery in residential investment in the second half of 2020”, added ANZ.
