Australian building approvals fell heavily for a second consecutive month in June, adding to evidence that Australia’s residential construction boom is now past its peak.
According to the Australian Bureau of Statistics (ABS), approvals slumped by 2.9% to 18,693 after seasonal adjustments, well below expectations for an increase of 0.5%.
May’s decline, originally reported as a fall of 5.2%, was revised to a drop of 5.4%.
Indicating that the weakness was broad-based, approvals for both houses and dwellings excluding houses — namely apartments — fell during the month.
Private sector house approvals slid 2.3% to 9,367, leaving them 5.9% below the levels of a year earlier. It was a similar story for apartments with private sector approvals slipping 2.4% to 9,116, down 4.8% on June 2015.
Whether measured in trend or seasonally adjusted terms, approvals in both categories are now moving lower, particularly for apartments.
Over the past year, including both private and public sectors, total dwelling approvals numbered 233,246, below the record level of 241,016 approved in the 12 months to October 2015.
While the number of dwellings approved continued to decline, the value of approvals bucked the trend, rising solidly thanks to a surge in the value of non-residential building.
According to the ABS, the value of total building approved rose 5.3%, recouping around half of the decline registered in May.
The value of residential building fell 1.5% – the second decline in a row — while the value of non-residential building jumped 20.8% following a 18.3% decline in May.
For residential, the value of both new dwelling approvals and alterations fell during the month, logging declines of 1.2% and 3.8% respectively. Compared to a year earlier, the value of new residential approvals rose by 1.3%, offsetting a drop of 1.9% for alterations.
As a result, it left the value of residential approvals flat compared to a year earlier.
Combined, the value of both residential and non-residential approvals over the past year totaled $106.9 billion, the highest 12-month total on record.