Australian building approvals rose for a third month in April, casting some doubt on the widely held view that residential construction will slow in the years ahead.
According to the Australian Bureau of Statistics (ABS), approvals rose by 3% to 20,243 after seasonal adjustments, easily exceeding expectations for a drop of 3%.
The figure was 0.7% higher than levels of a year earlier, and was the highest monthly total since October 2015.
The strength was entirely driven by private sector dwellings excluding houses — namely apartments — which jumped by 8.1% to 10,548, offsetting a decline in private sector housing approvals which fell 1.9% to 9,695.
In other words, there were more apartments than freestanding houses approved in April, something that up until recently had never been seen before.
Compared to April 2015, approvals for dwellings excluding houses jumped by 11.5%, the first year-on-year increase registered since October 2015.
Offsetting that figure, housing approvals skidded by 8.9%, the steepest annual decline since May 2012.
As a consequence of the lift in approvals excluding houses, the number of dwellings approved over the past 12 months rose to 234,475, the first increase recorded recorded since October last year.
Approvals excluding houses totaled 117,807 over the same period, exceeding those for houses which numbered 116,666. It was the sixth time in the past seven months that has occurred, having never been seen before in the history of the survey.
As Annette Beacher, TD Securities’ chief Asia-Pacific strategist mused following the release of the building approvals report, “brace for more apartment prices crash 30% on oversupply headlines”.
Adding to the strong headline figure, the value of buildings approved rocketed higher in April, jumping 18.3% to $9.666 billion, the second highest monthly total on record.
The value of residential approvals jumped by 8.4% to $6.587 billion, the highest level ever recorded. The value of new residential buildings rose by 7.2% to $5.84 billion with residential alterations surging 18.7% to $747.6 million.
Both were record highs.
Like that for residential, the value of non-residential approvals also jumped after four months of declines, increasing by 47.3% to $3.078 billion. It was the largest monthly total since January 2015.