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Lack Of New Home Building Remains Problem


Building approvals for June were in line with expectations falling 7.7% m/m after rising 20.5%. The multi-dwelling component drives volatility in the headline numbers. Owner-occupier approvals fell 1.3% m/m to be down 17.4% y/y while non-house dwellings fell 21% m/m and -21.4% y/y. There has been some improvement in momentum. RBA Governor Lowe has said that housing supply needs to rise and barriers to approvals need to be removed. Given that population over 15yrs grew 2.8% y/y, building approvals remain a problem area for the economy and pressure is likely to remain on rents and house prices as a result. The average approval value for new homes also remains high rising 12.5% y/y in June.

Australia number of private house dwellings %

Source: MNI - Market News/ABS

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