Australian dwelling approvals April 2015

Australia's dwelling approvals came in weaker than expected in April with a 4.4% decline vs expectations of a 2% fall.
The fall is not overly large - 10%+ monthly moves in approvals are quite common and the heavy concentration of high-rise approvals in recent months meant there was a risk of a sharp pull back at some stage.

Interestingly the detail does show a sharp fall in high-rise approvals - Westpac estimate these were down over 30% month to month - but with the impact partially offset by surprisingly strong gains in other segments.

Private sector house approvals jumped 4.7% in the month, a strong gain for a segment that tends to move 1-2% a month and has been flat-lining since August last year.

Medium density approvals were also firmer, up over 4%mth in seasonally adjusted terms, adds Westpac.
"That detail may be an indication of some stimulatory effects from the RBA's Feb interest rate cut with detached and medium density building arguably more sensitive than high rise activity to incremental interest rate moves", says Westpac.

The state breakdown showed the falls concentrated in NSW and Qld, both on reversing spikes in apartment approvals. Notably, the strength in private sector house approvals was heavily concentrated in NSW where approvals rose 9.2%mth.
Also notable was the value of renovation approvals which leapt 10.8% in April after a flat six months. Again, that may be an indication that lower interest rates are giving some additional momentum.

The same cannot be said for non-residential building approvals however, the value of which declined another 5.4% in April and only up 14.5% on a year ago because of a very weak base month - trend approvals are down 12.8%yr and are tracking lower at a rapid rate of knots.