Digital Finance Analytics (DFA) Blog
"Intelligent Insight"
We look at the latest stats from the ABS relating to new credit growth and building approvals, both which are sliding, and sliding fast.
Go to the Walk The World Universe at https://walktheworld.com.au/
Today’s post is brought to you by Ribbon Property Consultants.
The latest data from the ABS on new loans and building approvals contain some interesting insights, but the Canstar survey says borrowers do not want more rate hikes (any surprise?), ahead of the RBA decision tomorrow.
Go to the Walk The World Universe at https://walktheworld.com.au/
The total number of dwellings approved rose 3.6 per cent in seasonally adjusted terms in November, following a 13.6 per cent fall in October.
This uptick in construction may not continue, stating that while working from home may support approvals in the short-term, and that omicron could induce higher savings rates, there are bigger risks to building approvals – specifically higher interest rates.
We also know that because HomeBuilder brought forward a lot of housing projects; there are a lot of people who maybe usually would have started to build a home this year or next year that did it last year instead when they could have got HomeBuilder. So all of those factors together do create a risk of building approvals falling further in the longer term.
Go to the Walk The World Universe at https://walktheworld.com.au/
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We look at the latest numbers from the RBA and APRA on credit, and the ABS data on Building Approvals.
https://www.rba.gov.au/statistics/frequency/fin-agg/2021/fin-agg-0821.html
https://www.apra.gov.au/news-and-publications/apra-releases-monthly-authorised-deposit-taking-institution-statistics-for-19
https://www.abs.gov.au/statistics/industry/building-and-construction/building-approvals-australia/aug-2021
Go to the Walk The World Universe at https://walktheworld.com.au/
Data from the ABS today shows that the number of dwellings approved fell 0.8 per cent in October 2019, in trend terms, and has fallen for 23 months. Private dwellings excluding houses also fell, by 0.5 per cent.
The seasonally adjusted estimate for total dwellings approved fell 8.1 per cent in October, driven by a 11.3 per cent decrease in private dwellings excluding houses. Private sector houses fell 7.0 per cent.
The value of total building approved fell 0.7 per cent in October, in trend terms, and has fallen for two months. The value of residential building fell 1.2 per cent, while non-residential building fell 0.2 per cent.
Number of total dwelling units
The trend estimate for Australia fell 0.8% in October.
Number of private sector houses
The trend estimate for private sector houses approved fell 0.9% in October.
Number of private sector dwellings excluding houses
The trend estimate for private sector dwelling units excluding houses fell 0.5% in October.
Value of new residential building
The trend estimate for the value of new residential building approved fell 1.3% in October and has fallen for eight months.
Value of alterations and additions to residential building
The trend estimate for the value of alterations and additions to residential building fell 0.1% in October and has fallen for seven months.
Value of non-residential building
The trend estimate for the value of non-residential building approved fell 0.2% in October after rising for 14 months.
Across the states and territories, dwelling approvals fell in the Northern Territory (11.1 per cent), New South Wales (4.6 per cent), Queensland (1.4 per cent), and Western Australia (1.0 per cent). Tasmania (4.5 per cent), South Australia (3.1 per cent), Australian Capital Territory (3.1 per cent), and Victoria (1.3 per cent) recorded increases, in trend terms.
Approvals for private sector houses fell in New South Wales (2.3 per cent), Victoria (1.7 per cent), Western Australia (0.2 per cent), and Queensland (0.1 per cent). South Australia rose 2.0 per cent, in trend terms.
New South Wales
The trend estimate for total number of dwelling units approved in New South Wales fell 4.6% in October. The trend estimate for the number of private sector houses fell 2.3% in October.
Victoria
The trend estimate for total number of dwelling units approved in Victoria rose 1.3% in October. The trend estimate for the number of private sector houses fell 1.7% in October.
Queensland
The trend estimate for total number of dwelling units approved in Queensland fell 1.4% in October. The trend estimate for the number of private sector houses fell 0.1% in October.
South Australia
The trend estimate for total number of dwelling units approved in South Australia rose 3.1% in October. The trend estimate for the number of private sector houses rose 2.0% in October.
Western Australia
The trend estimate for total number of dwelling units approved in Western Australia fell 1.0% in October. The trend estimate for the number of private sector houses fell 0.2% in October.
The latest RBA and APRA stats reveals credit momentum is still slowing, and the full year results from ANZ shows the stresses in the system. And weaker building approvals are not helping either.
The number of dwellings approved fell 0.8 per cent in September 2019, in trend terms, and has fallen for 22 months, according to data released by the Australian Bureau of Statistics (ABS) today.
“The fall in trend dwelling approvals for September was the smallest monthly decline in six months,” said Daniel Rossi, Director of Construction Statistics at the ABS. “However, the number of dwellings approved remains 21.1 per cent lower than at the same time last year.”
Across the states and territories, dwelling approvals fell in the Northern Territory (9.3 per cent), Western Australia (2.4 per cent), Australian Capital Territory (1.8 per cent), New South Wales (1.2 per cent), Queensland (0.5 per cent) and Victoria (0.4 per cent). Tasmania (1.6 per cent) and South Australia (0.4 per cent) recorded increases, in trend terms.
In trend terms, approvals for private sector houses fell in Western Australia (2.7 per cent) and South Australia (1.3 per cent). Victoria rose 0.1 per cent, while private house approvals in New South Wales and Queensland were flat.
The seasonally adjusted estimate for total dwellings approved rose 7.6 per cent in September, driven by a 16.6 per cent increase in private dwellings excluding houses. Private sector houses rose 2.8 per cent.
The value of total building approved rose 1.4 per cent in September, in trend terms, and has risen for nine months. The value of residential building rose 0.5 per cent, while non-residential building rose 2.5 per cent.
The ABS today released building activity data for the June quarter of 2019 and for August 2019.
The trend estimate for total dwellings approved fell 3.9% in August.
The seasonally adjusted estimate for total dwellings approved fell 1.1% in August.
The value of residential building fell 2.9% and has fallen for six months.
The trend estimate of the value of new residential building work done fell 2.5% in the June quarter. The value of work done on new houses fell 1.7%, while new other residential building fell 3.5%.
The seasonally adjusted estimate of the value of new residential building work done fell 4.7% to $16,097.2m. Work done on new houses fell 4.7% to $8,682.9m, while new other residential building fell 4.7% to $7,414.3m.
Despite a small improvement in new home starts in the June quarter, they remain 20 per cent lower than against the same period a year ago.
Annual housing starts during the 2018/19 financial year fell in all states and territories, with the exception of the Australian Capital Territory (+17.8 per cent) and Tasmania (+5.3 per cent).
The largest annual fall was recorded in the Northern Territory (-28.4 per cent), followed by South Australia (-22.6 per cent), Victoria (-17.8 per cent), Western Australia (-14.3 per cent), Queensland (-13.9 per cent), and New South Wales (-13.1 per cent).
“The number of new homes commencing construction in the June quarter increased by 1.1 per cent, the first increase since December 2017,” said Tim Reardon, HIA Chief Economist.
Commenting on the results, Tim Reardon, HIA Chief Economist said “The number of new homes commencing construction in the June quarter increased by 1.1 per cent, the first increase since December 2017.
“The increase in total starts was due to a 21 per cent lift in multi-unit starts, mainly in NSW and WA. Detached housing starts have slowed to their lowest level since December 2013.”
“More recent data informs us that the downturn in detached home starts has slowed. The impact of three cuts to interest rates and small fiscal stimulus has slowed the decline in work entering the pipeline.
“The slowdown in building activity over the past 18 months has adversely affected the national economy and has been one of the main drags on GDP growth.
“A return to normal lending conditions would provide a boost to home building and the wider economy.
“Indications are that the downturn in new projects entering the pipeline are starting to improve following cuts to interest rate but the market is not yet at the bottom of this cycle.
We look at the latest from the ABS, on the day the RBA cut rates again.
The ABS reported that the number of dwellings approved fell 3.9 per cent in August 2019, in trend terms, and has fallen for 21 months.
“The fall continues to be driven by private dwellings excluding houses, which decreased by 9.2 per cent in August,” said Daniel Rossi, Director of Construction Statistics at the ABS. “Private sector houses also fell, by 1.0 per cent.”
Across the states and territories, dwelling approvals decreased in August in the Australian Capital Territory (27.7 per cent), Northern Territory (8.7 per cent), New South Wales (5.4 per cent), Victoria (4.0 per cent), Queensland (2.3 per cent), South Australia (0.9 per cent), Tasmania (0.4 per cent) and Western Australia (0.2 per cent), in trend terms.
In trend terms, approvals for private sector houses fell in Western Australia (4.3 per cent), Queensland (1.7 per cent), South Australia (1.6 per cent) and Victoria (1.0 per cent), but rose in New South Wales (0.9 per cent).
The seasonally adjusted estimate for total dwellings approved fell 1.1 per cent in August, driven by a 2.4 per cent decrease in private houses. Private dwellings excluding houses rose 3.1 per cent in seasonally adjusted terms.
The value of total building approved rose 1.1 per cent in August, in trend terms, and has risen for eight months. The value of residential building fell 2.9 per cent, while non-residential building rose 5.7 per cent in trend terms.
“The value of non-residential building approved has risen for 12 months, to a record high of $4.8 billion. The rise in August was driven by approvals for health buildings in New South Wales,” said Mr Rossi.
