Building Approvals - Trending Lower

• Building approvals fell 1.5% in October, only partly reversing September’s 5.5% increase. The annual pace of building approvals deteriorated to a decline of 13.4% in October, after a fall of 12.8% in September.

 

• Despite the month-to-month volatility in building approvals, a downward trend remains intact. Over the past six months building approvals have declined by an average 1.1%. Nonetheless, building approvals remain above their long-term average, suggesting residential construction is likely to remain elevated in the near-term.

 

• The volatility in building approvals continues to be driven by ‘other’ private sector approvals (which includes apartments and townhouses). Approvals for ‘other’ private sector dwellings fell 4.8% in October, after jumping 13.0% in September. Approvals for private sector houses rose 2.7% in October, following three consecutive months of decline.

 

• The ongoing downturn in dwelling prices and other signs of slowing housing demand suggest residential approvals will slow further over the medium term. The slowdown in the housing market, however, will be mitigated by strong population growth and solid employment growth. 

 

Please see the attached report for more information.

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