Building Approvals Fall Again

The momentum of building approvals continued to ease in September especially in Sydney and Melbourne, indicating the massive construction bulge in residential building – especially apartments –  may be shrinking.

The latest data from the ABS show that building approvals to end September 2016 fell again. The trend estimate for total dwellings approved fell 0.6% in September and has fallen for four months. The seasonally adjusted estimate for total dwellings approved fell 8.7% in September and has fallen for two months.

Moreover, in seasonally adjusted terms, whilst private house approvals rose by 2.3% to 9,605, dwellings excluding houses, i.e. apartments, crashed by 16.3% to 9,166. Unit counts have been very volatile. In trend terms we are still building more units than houses nationally.

building-approvals-sept-2016Looking at the approvals (in original terms) across the main urban centres, in Greater Sydney approvals fell 16%, in Great Melbourne they were down 21%, in Great Brisbane they rose 12%, in Adelaide they were up 9%, whilst they fell in Perth.

building-approvals-sept-2016-stateThe trend estimate of the value of total building approved rose 2.1% in September and has risen for 10 months. The value of residential building fell 0.1% and has fallen for two months. The value of non-residential building rose 6.0% and has risen for eight months.

The seasonally adjusted estimate of the value of total building approved rose 29.9% in September following a fall of 7.7% in the previous month. The value of residential building fell 4.4% after rising for two months. The value of non-residential building rose 118.9% after falling for two months.

Author: Martin North

Martin North is the Principal of Digital Finance Analytics

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