The building approvals data released by Australian Bureau of Statistics (ABS) for April 2014 reveals that the number of dwelling approvals came in well below expectations recording a -5.6% monthly fall with house approvals -0.3% lower and the more volatile unit approvals -14.0% lower.
With the economy transitioning away from large infrastructure projects related to the commodities sector, a lift in dwelling construction was expected; however, approvals have now fallen for three consecutive months and in six of the past seven months. Year-on-year, dwelling approvals are only 1.1% higher with house approvals 16.5% higher and unit approvals -16.6% lower. While approvals remain strong on an annualised basis, the recent weakness is clearly a cause for concern. Over the 12 months to April 2014, there have been 188,503 dwelling approvals, which is up 16.5% higher over the year and at its highest level since January 1995.
The National Accounts released by ABS for the first quarter of 2014 also indicates the gross domestic product (GDP) rising by 1.1% over the first quarter, the largest quarterly increase since March 2012. Over the year GDP growth was recorded at 3.5%, which was its highest reading since 3.8% over the year to June 2012 and well above the official forecasts from Federal Treasury. The biggest contributors to economic growth were exports (2.3 percentage points), domestic demand (1.6 percentage points) and household consumption (1.5 percentage points). On the other end of the spectrum, building investment and inventories, both detracted 0.7 percentage points from growth.
The National Accounts data also highlighted that the household saving ratio was recorded at 9.7% up from 9.6% the previous quarter but down from 10.7% at the same time in 2013.
The Reserve Bank (RBA) board has also decided to keep official interest rates on hold at 2.5% for the 10th consecutive month.
Auction activity increased last week with 3,072 auctions across the combined capital cities, up from 2,786 the previous week. The weighted average capital city auction clearance rate was recorded at 66.4% last week, which was down from 67.1% the previous week. Melbourne, the country’s largest auction market recorded the clearance rate at 65.4%, which was down from 66.6% the previous week. Across Sydney, 1,316 auctions were held and the clearance rate was recorded at 73.0% compared to 1,115 auctions and a 73.1% clearance rate over the previous week.
Over the four weeks to 1 June, there were 42,463 newly advertised properties listed for sale nationally. The number of newly advertised property listings fell by -5.3% over the week and they are currently 10.1% higher than at the same time last year. Across the combined capital cities, new listings were -5.8% lower over the week and 14.9% higher than a year ago.
There are currently 248,797 properties listed for sale across the country. Total listings at a national level were virtually unchanged over the week and are 0.2% higher than they were at the same time last year. Across the combined capital cities, total listings have increased by 0.2% over the week but are -3.3% lower than they were at this time a year ago. Capital city listings account for just 42% of all listings nationally.