Australian residential building approvals in April down for third straight month after reaching decade high in January; homebuilding activity should remain historically high through middle part of 2014 on earlier building approvals: Housing Industry Assn.

CAMPBELL, Australia , June 2, 2014 (press release) – ABS figures for residential building approvals slipped back for the third consecutive month in April 2014 after reaching a decade high in January although the quantum of approvals remains strong, said the Housing Industry Association, the voice of Australia’s residential building industry.

“The monthly volume of building approvals in April 2014, continued to recede from the decade high achieved back in January, although with close to 15,000 dwellings approved in the month it is still a very positive result,” said HIA Economist, Geordan Murray.

In April 2014 total building approvals fell by 5.6 per cent to 14,931 (seasonally adjusted). Detached house approvals were effectively flat in the month (-0.1 per cent) but remained at a level that is 16.1 per cent higher than April a year ago. Approvals for ‘other dwellings’ fell by 13.5 per cent in the month and were down by 17.0 per cent compared to the level a year earlier.

“The pace of building approvals late in 2013 and early 2014 moved well ahead of the pace of home building commencements. So while we have seen building approval activity moderate over recent months, the pipeline of residential building work already approved should sustain a historically high level of activity throughout the middle part of the 2014,” said Geordan Murray.

“While declining numbers of multi-unit approvals have been behind the recent decline, they still represent a historically large share of multi-unit dwellings in the pipeline. The longer build time associated with the larger multi-unit development projects means that work already approved could well sustain activity for some time to come,” added Geordan Murray.

“We expect to see the improved levels of residential building activity to be reflected in a stronger contribution to GDP growth in the March 2014 quarter when the National Accounts are released later in the week. The RBA will be happy see low borrowing costs having the desired effect but it is unlikely to be a decisive factor in their interest rate deliberations tomorrow,” concluded Geordan Murray.

Seasonally adjusted building approvals increased in April 2014 in Victoria (+14.8 per cent), South Australia (+12.2 per cent) and Western Australia (+4.4 per cent). Approvals declined in New South Wales (-22.8 per cent), Queensland (-20.3 per cent), and Tasmania (-10.4 per cent). In trend terms, building approvals declined by 12.0 per cent in the Northern Territory and fell by 5.8 per cent in the ACT.

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