The ABS has just released building approvals for September and they’re up an adjusted 14.4% for the month.
Private sector houses were fairly quiet rising just 1.5% with units through the roof, up 31.8% month-on-month.
Some might downgrade this data as so much of it is on the unit category, and the fact that with demand for credit only rising 0.4% in the month, it is hard to square the two data points up.
But in an increasingly tight housing market the bottom rung on the ladder is no longer the quarter acre block 50 kilometres from the central business district but rather something closer and in a unit complex.
It’s all about affordability and lifestyle.
The really good news is the 2.5% increase in the trend for building approvals. And while we know majors such as ANZ are on-the-record saying this is going to be a muted construction cycle, the RBA will be happy that it looks like some construction is actually kicking in — monetary policy still works.
The RBA will however be less happy with the rally in the Aussie Dollar which is now back at 95 cents, on the back of this strong data.
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