Housing construction recovery “well entrenched” in WA and NSW: Westpac’s Matthew Hassan
An upturn in the building of new houses and apartments is now “well entrenched” in NSW and WA, says Westpac senior economist Matthew Hassan.
There is a more gradual upturn in Queensland, but approvals are still trending down in Victoria, he says.
Hassan's comments follow yesterday’s ABS dwelling approvals data, which showed a greater than expected 9.1% bounce in approvals in April following a 5.5% fall in March.
Hassan points out that total building approvals in NSW rose 33% led by a 57% jump in unit approvals but with a strong 6.6% rise for private sector house approvals as well.
“Victoria also posted a strong 9.3% gain with a more evenly balanced mix (private sector house approvals up 8.2%).
“Queensland approvals fell overall but led by units with private sector house approvals up 8.8%.
“Approvals rose 4.3% in WA although private sector house approvals were down 10%,” he says.
“Stepping back from the monthly volatility, the upturn is well entrenched in WA and NSW but coming through more gradually in Queensland with trend approvals still falling 1% per month in Victoria,” he says.
Renovation activity is also improving with the value of renovation approvals rising 1.5% in April "continuing its improvement from a soft run earlier in the year".
Overall, Hassan says the housing construction recovery, “which began early last year but seemed to lose its way in late 2012 and early 2013 is showing signs of regaining momentum”.
“After trending lower through the first three months of the year, dwelling approvals rose 9.1% in April, well above market expectations of a 4% rise,” he says.
Hassan adds that the strong 18% rise in private sector units in April – a traditionally less reliable number often skewed by the launch of new high rise and medium density projects – “showed fairly broad gains”.
“Both 'high rise' and 'low to mid-rise' sub-categories drove the rise. The more granular geographic detail also shows a broad gain rather than one driven by individual projects,” he says.
