Building Approvals better than expected but it’s all due to units

Once again highly volatile unit approvals have pushed building approvals data for November above market expectations. While the market had been looking for a 4.6% m/m increase in the seasonally adjusted data (after a 12.6% drop last month) unit approvals resulted in an actual total increase of 7.0% (down 4.8% y/y). The less volatile Trend series showed a drop of 2.9% m/m and a 10.1% fall y/y.

Across the nation house approvals fell just 0.4% m/m and were down 2.1% y/y. However, unit approvals rose by 17.3% m/m but remain down 7.8% y/y.

In Queensland total approvals were down 4.6% m/m for a 28.5% decline on the year. The Trend series showed drops of 3.9% m/m and 22.5% y/y. In the Sunshine State the divergence between what’s happening to house and unit approvals is even more marked than at the national level. House approvals in November fell 2.3% m/m but remain up 8% from a year ago. Unit approvals fell 8.6% in the month and are now down 55.6% over the year! The spike in unit approvals, particularly in Brisbane and the SE corner, that we’ve seen in the past 2 years looks to be well and truly over.

Regional building approvals data will be released next Monday at which time we will update our own Conus Regional Building Approvals data for all the SA4 regions in Queensland, as well as Conus Trend data for our regional Local Government Areas.

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