A sharp drop in the statistically volatile multi-residential sector in New South Wales has precipitated a substantial fall in monthly building approvals throughout Australia, albeit with the overall data continuing to imply strong levels of new construction activity.
On a seasonally adjusted basis, the overall number of dwelling units approved for construction throughout Australia dropped 5.6 percent in April to be now only 1.1 percent above the same level twelve months ago.
Leading the fall was the statistically volatile multi-residential sector, whereby a monthly drop of almost 40 percent in New South Wales (seasonally adjusted) drove a 14.0 percent overall and saw approvals in this segment down 16.6 percent year on year.
But the more stable market for stand-alone private sector houses eased back by just 0.3 percent and remained 16.5 percent up on its level in April 2014.
Moreover, the overall data – which follows data earlier last week showing new home sales at their highest level in around three years – continues to imply extremely strong levels of new home building activity.
At 14,931 (seasonally adjusted), the overall number of housing units approved implies an annual building rate of just above 179,000 – well above any level achieved over the past ten years.
Still, ANZ Senior Economist Justin Fabo expressed disappointment at the latest figures.
"We've still got a lot in the pipeline in terms of construction activity but the approvals numbers are saying that at some stage, the growth in that construction activity is likely to slow up unless approvals start to pick up again,” Fabo is quoted as saying on Australian Associated Press.
"The question is now how much it slows."
The latest figures follow last week’s prediction by Housing Industry Association that construction would commence on 180,000 homes during the current calendar year – a figure which would be only just missed on the volumes implied by the latest monthly data.