The sum of the seasonally adjusted dwelling units approved in the month of November 2016 rose by 17569 units compared to the previous month, according to the recent data from the Australian Bureau of Statistics (ABS). The month on month increase of 7 per cent after three successive months of fall was largely due to a sharp rise of more than 18 per cent in multi-unit approvals which exclude houses while approvals for private sector housing continued to remain weak with a modest decline of 0.2 per cent during the same period, bringing the overall numbers for the year until the end of November 2016 to 211,000 units. In terms of value, the estimate of the seasonally adjusted buildings approved in November was up 2.3 per cent following a sharp decline of 29.0 per cent in October.
Trend estimates of private sector housing approvals continued to suffer with figures in November 2016 down by 0.4 per cent, leading to a negative growth in 8 of the 11 months of the year. The sum of the trend estimates in November was also hit with the figures down by about 3 per cent from October. The overall monthly approvals in 2016 are in the negative territory for 6 out of the 11 months so far.
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Dwelling units approved and Private sector houses approved (Source: ABS)
Compared to November 2015, the seasonally adjusted approvals are down 4.8 per cent and the trend approvals are lower by more than 10 per cent. The growth in approvals for November as per the seasonally adjusted figures may not clearly indicate a revival in the housing sector as the industry still continues to slowdown. For the industry to even indicate a revival, the trend should continue over the next few months. Experts are mixed in their opinion about the overall trend of the housing activity in Australia. While some of them are of the view that the approvals for the housing sector are expected to decline in 2017, others think that the rise in volume of residential construction in 2017 might bring some balance.
A further decline in the rate of building approvals is a cause for concern as the industry is the third largest source of employment for Australians after the health and retail sectors in the country.
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