The slowdown in Australian home building looks to be happening at a more moderate pace than it did a month ago, after new housing approvals in April partially recovered from a slump the previous month.
Approvals for new home construction rose 4.4 per cent in April, data from the Australian Bureau of Statistics showed on Tuesday, beating market expectations of a 3.0 per cent rise.
The gains were driven by a rebound in the ‘other dwellings’ category, which includes apartment blocks and townhouses, with approvals up 9.6 per cent.
Approvals for private sector houses rose 0.5 per cent in the month.
Building approvals had slumped by a worse-than-expected 13.4 per cent in March, although this figure has now been revised to a 10.3 per cent decline.
The sharp fall, particularly in the apartments category, had stoked fears that the residential boom was slowing at a faster-than-expected pace, but economists said the trajectory now seems less alarming.
“The detail suggests weather disruptions contributed to the choppy pattern over March-April, although the broader picture of a high-rise driven slowdown remains intact,” Westpac economist Matthew Hassan said.
That view was underlined by the figures on an annual basis, with building approvals down 17.2 per cent over the 12 months to April.
Within that, apartment approvals are down 26.5 per cent over the period.
“Despite the better-than-expected April print, the data are still consistent with a material softening in the residential construction pipeline so far in 2017,” JP Morgan economist Tom Kennedy said.
“While we don’t think residential construction is quite at its peak, the current flow of building approvals suggests not much further upside from here.”