The residential construction industry in Australia has received some heartening news with the latest figures showing that building approvals remain at sky high levels even as there are suggestions that the home building market will slow.
On a seasonally adjusted basis, data from the Australian Bureau of Statistics indicates that 20,788 new houses and apartments were approved for construction in August – slightly down from blistering result of 21,170 but still the third highest level on record.
Leading the charge was the multi-units sector, where approvals sit at near record highs of 11,313.
Leading the way in terms of states, meanwhile is New South Wales, where approvals (seasonally adjusted) sit at record highs and the combined number of approvals in July and August combined was up by almost twenty percent compared with the combined total of May and June.
The latest data comes as the Reserve Bank has left interest rates on hold for another month.
Announcing its latest decision, Reserve Bank Governor Philip Low said that low interest rates had been supporting domestic demand in the economy but that stronger supervisory measures within the finance sector had strengthened lending standards whilst housing market turnover and price growth had moderated.
“Taking account of the available information, and having eased monetary policy at its May and August meetings, the Board judged that holding the stance of policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time,” Low said in a statement.
Despite the bullish headline number, signs of an easing in some parts of the market continue.
Whilst New South Wales is booming, approvals in South Australia and Western Australia are both at around their lowest levels in at least two years, whilst approvals in the more stable detached house sector came in at their slowest pace across Australia in nearly two years even as the more volatile multi-unit segment of the market continued to soar.
That suggests that the pace at which new work is coming in is actually slowing outside of the statistically volatile multi-unit sector within east coast markets.
Finally, despite having risen in August, new home sales have general trended lower in recent months, another sign that conditions may be slowing.