Housing approvals in Australia rise in November but falls on overall trend

Bureau of Statistics data showed that dwelling approvals in Australia fell over the six months to November based on overall trend terms although it rose in November by seven percent. Out of 17,569 dwellings that were approved, 7,966 were apartments and townhouses.

Northern Territory, New South Wales, Queensland, the ACT, Victoria and South Australia approvals fell while Tasmania remains flat. However, Western Australia was the only state that recorded an increase in approval. It increases up to 1.9 percent.

CommSec senior economist Savanth Sebastian said that the data showed the second bounce in the past seven months. He said that it was a reflection of tighter lending by banks. He added that it would continue into 2017.

Shane Garrett, senior economist for the Housing Industry Association, wrote in a note that the association is anticipating that new dwelling approvals will decline toward the end of the year. However, he said that the volume of residential construction will remain high in 2017.

Garret said that November was a particularly good month on the multi-unit side of the market. He said that its approvals increased by 17.3 percent during the month following a big fall in October.

Meanwhile, the performance of the construction industry was measured by the Ai Group's Performance of Construction Index (PCI). Based on the data released, there was an increase of 0.4 points in December. However, it only reached 47 points which were below the 50-point level separating the expansion from contraction.

Ai Group's head of policy Peter Burn said that the construction sector closed out 2016 with contracting conditions.

Burn said that the levels of apartment building remain well above average but the four sub-sectors of apartment building, house building, engineering construction and commercial construction decreased in December.

The final month of 2016 has declined while both house and apartment building activities contracted.