The total number of building approvals fell a seasonally adjusted 4.40 per cent in April, according to data from the Australian Bureau of Statistics (ABS). On Monday, the data showed new building approvals coming in at 18,715. Economists surveyed by Bloomberg expected a 1.80 per cent decreasing in approvals. The figures released on Monday missed forecasts significantly, falling 2.60 per cent more than expected. The lower figures were partially offset by a 4.70 per cent rise in house approvals, which came in at 10,130 in total.
The higher than expected fall was accelerated by the sharp decline in apartment building approvals. This sub-sector experienced a 15 per cent drop in the number of approvals, totalling only 8,271. For the year, apartment building approvals were down 27.5 per cent. On a yearly basis, total building approvals were up 16.3 per cent but failed to meet the expected 20.5 per cent. The seasonally adjusted estimate for private sector houses was positive in April and has risen for four consecutive months. On an annual basis, this sub-sector was up 9.10 per cent.
The value of residential buildings fell 3.50 per cent in April. The value of apartment buildings fell ever further at 5.40 per cent. In the previous month, building approvals and values were generally up. Although April is showing weakness, analysts believe the fall is only temporary. “Despite the weakness in the month – underpinned by the typically volatile apartment starts component – the level of approvals remains at near record highs as low interest rates and strong dwelling prices provide a favourable environment for dwelling construction," said Deutsche Bank senior economist Phil O'Donaghoe.
Author: Imran Valibhoy
Jun 01, 2015
Since Joining the firm in 2006, Imran has worked on a range of M&A and Capital Market transactions in the natural resources, mining as well as projects in the renewable energy sector. Prior to joining Wise-owl, Imran worked at Euroz Securities in Perth, aiding in the advisory and valuation of companies in the mining and industrial sectors in Australia. Imran has a Masters in Banking & Finance from City University's Class Business School in London and a Bacheloor degree in Commerce from UWA.