Unit approvals slide drags total down; QLD especially weak

The ABS Building Approvals data for September shows the total across the nation being dragged lower than expected by a sharp drop in unit approvals. Houses actually gained slightly over the month, but remain weaker than a year ago.

On a seasonally adjusted basis total approvals fell 8.7% m/m which resulted in a 6.4% drop over the year. However, that decline is led predominantly by units which fell 17.5% m/m and are down 10.7% for the year. House approvals rose 1.7% m/m but remain 1.9% weaker over the year.

The less volatile Trend series (which we much prefer given the “lumpiness” of unit approvals) shows a 0.6% decline for the month but is still 2.1% higher over the course of the year.

In Queensland this slowdown in unit approvals is even more dramatic (perhaps not surprising when we consider all the stories about the massive supply of units Brisbane is about to see come online). Seasonally adjusted data showed a 11.7% decline in total approvals for the month which means a 31.5% drop over the year. However, as nationally, this is driven largely by units; these fell 27.8% this month and are down 48.2% from a year ago. House approvals rose 9.7% this month but are still 4.4% weaker than a year ago.

The Trend series for Queensland shows a 1.6% decline for the month with the rate dropping 7.7% from a year ago. Trend approvals in Queensland are now down to their lowest level since the start of 2015.

The Conus Trend Regional Building Approvals data will be released next Tuesday.


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