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Matthew Hassan, analyst at Westpac, notes that the Australian dwelling approvals fell 15.5% in Feb, unwinding a 19.1% jump in Feb that reflected a big spike in high rise approvals.

Key Quotes

“That was in line with Westpac’s forecast but a touch weaker than the consensus view of a 12.5% decline.”

“Headline moves over the last two months have been driven by ‘high rise’ units with approvals in the segment more than doubling between Jan and Feb and nearly halving again between Feb and March. Approvals in this segment are still well above Jan’s extreme low and about 10% above the average level over the 3mths to Jan.”

“Overall the March dwelling approvals update again points to weakening underlying momentum, highlighting downside risks to the near term outlook for new dwelling construction. So far the weakness mostly just cancels out the lift from the Feb high rise spike. However clearly there are downside risks to the outlook if the weak momentum continues in coming months, particularly if we also start to see approved high rise projects get put on hold.”