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Matthew Hassan, analyst at Westpac, points out that the Australian dwelling approvals posted a better than expected 2.5% lift in Jan, paring back some of the weakness seen in previous months as the approvals slid over 25% through the last three months of 2018.

Key Quotes

“The consensus forecast had been looking for a 1.5% gain.”

“The detail was mixed. On the positive side, the weakness in non high rise approvals, which was one of the more striking features of the deterioration between Oct and Dec, showed a decent reversal. Detached house approvals in particular posted a solid 2.1% gain, reversing all of last month’s 1.7% decline (but still down 2.6% on a rolling 3mth average basis). That may be an indication that some of the earlier weakness may have related to longer delays in obtaining finance.”

“Overall the Jan update pares back some of the concerning weakness that was emerging through the back end of 2018, particularly around non high rise activity. However, the through the year numbers are clearly still very weak and dwelling construction will continue to detract materially from growth in 2019.”