In Australia, residential building approvals have been fluctuation in the past year. However, they have increased for two consecutive months now. Higher density segment in New South Wales mainly drove the growth in previous month, and the rise was continued in March. Queensland and Victoria have also recorded modest gains.
The housing sentiment in Australia is expected to ease further in the following months as the effect of 2015’s macroprudential regulatory measures will keep having a negative impact on demand, according to ANZ. But if the recent data’s strength is maintained, the above mentioned view might be altered.
Along with the rebound in building permits, construction finance has also improved and is trending higher. With a high backlog of housing work, there is a risk that the momentum to growth from residential construction does not decelerate to the degree of expectations, added ANZ. This gives an element of upside risk to the GDP outlook.
Non-residential permits dropped sharply again in March. They are almost 30% below the peak seen in December 2013. The non-residential investment outlook continues to be challenged, said ANZ.
