Matthew Hassan, Research Analyst at Westpac, notes that Australia’s dwelling approvals fell 3.2% in May, well below the consensus forecast for no change but more in line with Westpac’s forecast for a 4% decline.
Key Quotes
“On a rolling 3mth avg basis, total approvals are now down 8.4% from their Nov peak but still up 6.7%yr.”
“The detail showed weakness in May concentrated in private detached houses, which dropped 8.6%mth to be down 1.2%yr. While this is broadly consistent with weaker construction-related finance approvals in recent months, the extent of the monthly move is large for what is usually a fairly stable component. With some wild swings in some of the state detail, we advise caution in interpreting the latest figures.”
“Unit approvals rose 4.3%mth, reversing some of April’s 14% fall, the turnaround led by the high rise segment (we estimates up about 14% in seasonally adjusted terms).”
“Overall the detail of the May approvals report suggests the headline weakness should be treated with some caution.”
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