Non-House Approvals Struggle To Recover

Australia has a housing shortage and the June building approval data signalled that the situation is not improving as scarce labour and material continue to weigh on the sector. The number of dwellings approved fell 6.5% m/m after rising 5.7%, with both private houses and multi-dwelling units contracting but it was the latter, which is very volatile, which drove the disappointment.

• Bright spots were the second straight month of positive 3-month momentum and private homes up 11% y/y. But the ABS notes that FY24 recorded the lowest number of new dwellings approved since FY12.
• Total approvals were down 3.7% y/y in June as private homes fell 0.5% m/m and non-houses 19.7% m/m, which left this sector down 22.1% y/y. Houses are now 4.4% above the pre-Covid level in February 2020 but multi-dwellings are a significant 46.8% lower leaving the total 18.5% below. House approvals are gradually trending higher while non-houses are lower.
• The value of alterations and additions rose to a series high in June, suggesting that it is easier for many to renovate than move or build.