Big miss for Building Approvals nationwide but QLD does better

Today’s release of Building Approvals data was a big disappointment for the markets. Expectations had been for (seasonally adjusted) data to show approvals down about 8% m/m (+11% y/y) after a 11.7% increase in Nov. In fact the monthly decline was a thumping 20% which took the annual growth into negative territory at -5.5%. The decline came from a massive reduction in unit approvals (down 38.8% m/m) despite a modest pick up in house approvals (+1.4% m/m). This degree of volatility in the seasonally adjusted data due to the lumpiness of unit approvals is why we much prefer considering the less volatile Trend series.

Doing so shows Trend approvals fell 1.7% m/m and are up 3.3% y/y (after some downward revisions to the Nov data). Over the year Trend house approvals are up 4.4% while units have risen just 2.1%.

In QLD things looked somewhat healthier. The seasonally adjusted data showed a 4.2% m/m increase (+8.1% y/y), but the Trend series fell 0.8% m/m and is up just 4.4% y/y (after some positive revisions to Nov). Trend house approvals in QLD rose 9.3% y/y while the unit market continued to show weakness, on the back of very rapid growth in previous years, and are down 4.1% y/y.

Regional data for approvals will be released next week at which time we shall be updating our Conus Trend Regional Approvals for SA4 regions in QLD as well as for our local North QLD Council areas.

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