MNI Australia Dwelling Approvals In Trend Decline For 9 Months

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By Sophia Rodrigues

     SYDNEY (MNI) - Dwelling approvals in Australia fell sharply in August,

contrasting expectations for a small rise and leading to nine months of decline

in trend terms.

     The data suggests dwelling construction could soon become a bigger drag on

growth but could bode well for the outlook for rent which has remained low. Any

acceleration in rent due to a slowing in housing supply would be positive for

the outlook for inflation and for the Reserve Bank of Australia's monetary

policy guidance for the next move in the cash rate to be up. 

     Data published by the Australian Bureau of Statistics Wednesday showed

dwelling approvals fell 9.4% m/m compared with MNI median forecast for a 1.0%

rise. The outcome was well outside the range predicted by economists in MNI

poll.

     The 9.4% fall was the largest since the 22.4% decline in December, and

marks three months of fall in the last four. In trend terms, dwelling approvals

fell 1.9% m/m in August and has been in negative for nine straight months.

     The fall in total approvals was driven by a sharp 17.2% fall in private

sector multi-units and also a 1.9% fall in private sector houses.  

     In value terms, total buildings approved fell 9.5% m/m in August after a

6.9% rise in July. The value of residential building approved rose 0.7% but the

value of non-residential building fell 24.5%.

     From building approvals data for August  published by the Australian Bureau

of Statistics on Wednesday:

                                            August                          July

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

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

                              seasonally adjusted)          seasonally adjusted)

Dwelling Units

Approved                                      -9.4       -4.6(revised from -5.2)

MNI Median                     +1.0 (-5.0 to +3.4)

Dwelling Units

Approved (Trend)                              -1.9                          -2.3

Dwelling Units

Approved Y/Y                                 -13.6    -5.6(last month's release)

Private Houses                                -1.9                          -2.7

Private Units

Excluding Houses                             -17.2                          -5.2

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

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