Matthew Hassan, Research Analyst at Westpac, notes that Australia’s dwelling approvals bounced 6.4% in June, coming in well above expectations with the consensus forecast a 1% gain.
Key Quotes
“The detail confirmed May’s 2.5% decline was likely a data issue with Qld approvals rebounding from their extreme fall.”
“Outside of this, the picture is more mixed but is clearly not showing the anticipated weakening, particularly across high rise which recorded another relatively strong month.”
“Other housing market indicators have shown a clear softening in recent months.”
“Meanwhile the daily price data indicates that the monthly CoreLogic update due out tomorrow will likely show a 0.6% decline in prices nationally for July with the pace of decline quickening, particularly in Melbourne. That raises the likelihood of a renewed slowdown in building activity, particularly given a tighter funding environment. However, the continued resilience in dwelling approvals means the effect of a renewed slowdown on construction and economic activity will come through later in the piece, i.e. 2019 and beyond.”
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