Dwelling approvals and sales up for August, but still low

He said overall, approvals were “still well down” when compared to August 2016, and may indicate an early warning that residential construction could be entering into a “more moderate period”.

“The value of residential building work fell in the March quarter and we expect a similar result when the June quarter statistics are released next week,” Mr Pollack said.

“But with the latest cyclical trough in residential approvals passing us back in May, this latest data also supports an outlook for a more moderate correction to the value of residential construction work over the next year or two.

“We still expect activity to remain high by historical standards and provide plenty as a source of employment and growth for the economy.”

Sales

Much like housing approvals, housing sales also saw an increase, but was down when compared to as a year ago, according to the Housing Industry Association (HIA).

“New home sales increased by 9.1 per cent last month as a result of very strong results in Victoria and Western Australia, but over the year sales have continued to slow,” said Tim Reardon, HIA’s principal economist.

Looking at each state, for the last three months to August in comparison to the same period last year, home sales in Victoria and South Australia were up 15.7 per cent and 9.2 per cent respectively, while home sales were down in Queensland at 7.3 per cent, Western Australia at 15.4 per cent, and NSW at 17.4 per cent.

Both the Northern Territory and the Australian Capital Territory did not have enough home sales for enough data to be collected.

Due to a rise in sales back in July, Mr Reardon is predicting a slowdown in building activity up until FY2018-19.

Despite an increase in sales in August, Mr Reardon said that it would not be enough to change the forecast.

“Results in July and August have been affected by government interventions in NSW and Victoria which have seen first home-buyers returning to the new home market.

“Victoria has seen record numbers of new building approvals and new home sales are continuing to drive even higher. Strong population growth and employment growth, fortified with enhanced first home buyer incentives, is prolonging the boom in building activity.”

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