The ABS released Sept Building Approvals data shows total approvals (seasonally adjusted) rose 2.2% m/m for a 21.4% increase on the year. However, previous month’s data was revised slightly weaker. The data is always liable to high levels of volatility because of the “lumpy” nature of unit approvals, and this is indeed the case this month. Total house approvals were down 2.0% for the month while units rose by 6.9%. A focus on the Trend data can help see through some of this volatility and here we see Trend approvals down 1.8% m/m (with previous months also revised weaker) for a 6.8% y/y increase (the slowest pace of Trend annual growth since Aug 2012).
The story is Queensland was also one of high volatility caused by unit approvals. Indeed the increase in unit approvals in QLD was much greater than the total increase in unit approvals across the whole country (units rose 1,435 in the month while at a national level units were up 601). The seasonally adjusted data saw total approvals in QLD up 41.6% for the month which gives a 72.4% y/y increase! However, within this extraordinary data we see that house approvals were up just 4.5% m/m with units up a massive 83.9%. Looking at the Trend data is the only way of getting some kind of sensible grip on data this volatile. Here we see Trend approvals actually fell by 0.3% m/m for an increase of 12.9% y/y (with some upward revision to previous months).
The graph below clearly shows the slowdown at national level with the story in QLD one of (hopefully) a stabilisation.