Australia June Dwelling Approvals Up Sharply; Trend Positive

--Approvals Rise in Western Australia on Multiunits

--Value of Nonresidential Construction Remains Positive in Trend Terms

     SYDNEY (MNI) - From building-approvals data for June published by the

Australian Bureau of Statistics on Wednesday:

                                              June                           May

--------------------------------------------------------------------------------

                              (M/M% unless stated;          (M/M% unless stated;

                              seasonally adjusted)          seasonally adjusted)

Dwelling Units

Approved                                     +10.9       -5.4(revised from -5.6)

MNI Median                +1.5(range -4.0 to +5.0)

Dwelling Units

Approved (Trend)                              +0.1                          -0.3

Dwelling Units

Approved Y/Y                                  -2.3  -19.7 (last month's release)

Private Houses                                +3.4                          +1.3

Private Units

Excluding Houses                             +20.0                         -12.4

     FACTORS: The number of dwellings approved rose in June for the biggest pace

of increase since July last year as the number of multiunit approvals jumped.

Private-house approvals contributed to the gain -- rising 3.4% for the biggest

increase in at least a year. The rise in house approvals mainly came from gains

in New South Wales and Queensland while the increase in multiunit approvals came

from Western Australia -- which is surprising given the fall in housing prices

there (total approvals rose 19.6% in Western Australia). In trend terms overall

dwelling approvals turned positive for the first time in at least a year. 

     Total building approvals by value rose for the third consecutive month --

up 2.2% in June after a 1.7% increase in May. The rise was mainly a result of a

5.5% increase in residential building approvals which offset a 2.6% fall in

nonresidential approvals. Approvals for alternations and additions rose for a

second consecutive month -- up 6.7% compared with 13.9% in May and in trend

terms, too, it was positive for a second consecutive month. Trend approvals for

nonresidential building value were positive -- up for five consecutive months

after five months of decline.

     TAKEAWAY: The outcome was much higher than a MNI median forecast and and

well outside the range predicted by economists in a MNI poll. The positive in

the overall data is that trend value for nonresidential construction remains

strong. But dwelling construction, despite the latest gain, is expected to slow.

The Reserve Bank of Australia may have downgraded the outlook for housing

construction but full details will be available in the Statement on Monetary

Policy on Friday. In the cash-rate statement Tuesday the RBA said, "the current

high level of residential construction is forecast to be maintained for some

time, before gradually easing."

--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com

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