The Australian Bureau of Statistics just released the building approvals data for June which showed a continued pullback from the recent upswing in dwelling unit approvals.
The number of dwelling approvals fell a seasonally adjusted 5% to 15,659 with private sector housing down 2.2% and private sector dwellings excluding houses (apartments, effectively) falling 10.5% in June.
This is a big fall with the 5% drop greater than the -2% the market expected, however, reinforcing the fact that monetary policy and low interest rates are still doing their job. The year-on-year rates are still solidly higher, with overall total dwelling units approved up 16% – that’s housing up 13.1% and apartments up 23.2%.
So building approvals are in a strong uptrend but, for the moment, the peak looks to be past.
But data released by the RBA today, showing that total demand for credit (debt) rose 0.7% to a year to June rate of 5.1% and housing credit was up 0.6% month-on-month and 6.4% year-on-year, suggests approvals might just be a pause while the recovery in confidence gains traction.