New building numbers from the Australian Bureau of Statistics beat expectations but approvals for new homes is slowing.
Total dwelling units approved in August increased a seasonally adjusted 3% to 16,810, according to the ABS. This gives a 12 month increase of 14.5%.
Market economists had expected around 1% for the month
However, private sector housing approvals, of houses to live in, fell 1.8% to 9,231.
The big increase was in private sector dwellings excluding houses which was up 9.6%.
This means higher density dwellings drove the overall improvement in dwelling approvals.
Economist Ben K Jarman of J.P. Morgan Australia says units have been the under-performer in the last six months.
“The lumpy flow of higher density building projects amplifies the volatility in related dwelling unit approvals, so it is best to focus on trend rates, and these are now rebounding,” he says.
“Given the rebound in approvals, and the lags to completions, we expect residential building to continue its solid positive contribution to GDP growth through 2015.”