Australia: Dwelling approvals decline on broad-based weakness - Westpac

Matthew Hassan, Research Analyst at Westpac, notes that Australia’s dwelling approvals posted a sharper than expected pull back in July, falling 5.2% vs consensus expectations of a 2% decline.

Key Quotes

“It should be noted that monthly approvals are very volatile – a 5% move being about par for the series – and that the previous month had seen a strong rise (6.8% revised up a touch from 6.4% previously). That said, the detail was consistently on the weak side with all segments and states recording declines in the July month.”

“Overall, the July report is a weak one for new building with the detail starting to move more in line with our expectation of a renewed decline in this segment.”

“With the Sydney and Melbourne housing markets swinging into price corrections and financing conditions tightening for both home buyers and developers, we may also start to see projects proceed more slowly or be shelved altogether.”